SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 Form 10-K                                 
                                                        
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                           EXCHANGE ACT OF 1934
                For the fiscal year ended December 31, 1996
                                    OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                           EXCHANGE ACT OF 1934

                        Commission File No. 0-17342

                          LIVE ENTERTAINMENT INC.
          (Exact name of Registrant as specified in its charter)

           Delaware                                  95-4178252
    (State or other jurisdiction of               (I.R.S. Employer
    incorporation or organization)                Identification No.)

    15400 Sherman Way, Van Nuys, California             91406
    (Address of principal executive offices)         (Zip Code)

   Registrant's telephone number, including area code: (818) 988-5060

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

        Securities registered pursuant to Section 12(g) of the Act:
                             (Title of Class)
                      Common Stock, $.01 par value,
                 Including Preferred Stock Purchase Rights
     Series B Cumulative Convertible Preferred Stock, $1.00 par value
                         Contingent Payment Rights
                                     
     Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.  Yes  X   No    

     Indicate by check mark 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. [X]  

     The aggregate market value of the voting common stock held by
non-affiliates of the Registrant as of February 28, 1997 was
approximately $5,943,022. 

     Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.  Yes X   No    

     As of February 28, 1997, there were 2,448,267 shares of the
Registrant's Common Stock, 3,819,802 shares of the Registrant's
Series B Cumulative Convertible Preferred Stock and 15,000 shares
of the Registrant's Series C Convertible Preferred Stock
outstanding.




<PAGE>
                                  PART I

ITEM 1.   BUSINESS

Introduction

     LIVE Entertainment Inc., a Delaware corporation (the "Company"
or "LIVE") was formed in 1988.  Its largest ongoing businesses are
LIVE Film and Mediaworks Inc. (formerly LIVE Home Video Inc.)
("LFM") and LIVE International ("LI"), which primarily acquire
rights to produce and distribute theatrical motion pictures,
children's films and special interest programs which they market
and distribute in all media to wholesalers, retailers and consumers
in the United States and internationally.  The Company's operations
are primarily in a single business segment, the worldwide
distribution and sale of a broad variety of film related
entertainment software products. 

     The Company's executive offices are located at 15400 Sherman
Way, Suite 500, Van Nuys, California 91406 and its telephone number
is (818) 988-5060.

     Operating Structure

     The following chart outlines the operating structure of the
Company as of December 31, 1996.  All except LFM and LIVE
Theatrical Distribution are unincorporated divisions of the
Company's subsidiaries.  As used herein the "Company" or "LIVE"
includes LFM, LI, or any of the operating entities listed below.

<TABLE>
                         LIVE Entertainment Inc.
<S>                 <C>               <C>              <C>                 <C>                <C>               <C>
LIVE Productions    LIVE Theatrical   LIVE Home Video  LIVE International  LIVE Television    LIVE Interactive  LIVE Film and
(production and     Distribution      (home video      (international      (cable, pay, pay   (interactive      Mediaworks
acquisition         (theatrical       distribution)    distribution)       per view, network  products          (contracting entity
of motion picture   distribution                                           television         including         for productions,
product)            of motion picture                                      licensing)         CD-ROM)           acquisitions and
                    product)                                                                                    programming)
                        
                                      Family Home 
                                      Entertainment
                                      (FHE)
                                      (children's 
                                      programming)
</TABLE>                                   
                                    
<PAGE>
                   
Recent Developments for the Company
                                    
Retention of Carreden Group
                                    
     In March 1996, the Company retained the Carreden Group,
Incorporated ("Carreden") to act as its exclusive financial advisor
to review the Company's current capitalization.  Carreden was
retained to advise the Company's Board of Directors in an analysis
of the Company's business operations and capital structure and to
develop alternatives that will accomplish the strategic and
financial objectives of the Company by securing for the Company a
more stable and appropriate capital base on which to operate in the future.  
                                    
     On August 21, 1996 the Company filed a Schedule 13E-4 with the
Securities and Exchange Commission which outlined a proposed
exchange offer and equity recapitalization plan (the "Equity
Rationalization").  In addition, the Company is seeking to replace
its existing $30,000,000 working capital facility with Foothill
Capital Corporation (the "Foothill Credit Facility") with a larger
working capital facility, and to refinance its current outstanding
$40,000,000 of Increasing Rate Senior Subordinated Notes due 1999
(the "LIVE Increasing Rate Notes").  The Company continues to negotiate
financing terms for an exchange offer.  In addition, the Company
has been approached about a possible transaction involving the sale
of the entire Company.  Any such transactions would be subject to 
a number of conditions, and there is no assurance either of these
transactions, or any other alternative transactions, will be finalized
or completed.  The Company believes that the Equity Rationalization, 
if completed, will simplify its existing complex capital structure, 
provide additional liquidity for growth and expansion, and reduce 
the cash dividend cost of its existing equity securities.  Failure 
of the Company to consummate an equity rationalization plan at this 
time would require the Company to begin conserving cash to retire 
the LIVE Increasing Rate Notes, of which $20,000,000 are due in 1998 
and the remaining $20,000,000 in 1999, and would therefore reduce the 
funds available for the Company's operations.   The completion of the 
Equity Rationalization is subject to completing satisfactory documentation
for refinancing sources of senior and subordinated debt, approval
by the Company's Board of Directors, shareholders and regulatory
agencies, completion of legal documentation, and acceptance of the
tender offer if and when made.  As such, no assurances can be given
that the Company's efforts will be successful.
                                    
Bankruptcy of Carolco Pictures Inc. ( Carolco )
                                    
     On November 10, 1995, Carolco filed for bankruptcy under
Chapter 11 of the United States Bankruptcy Code.  Carolco had been
a significant supplier of A+ motion picture product to the Company,
including the video rights to such hits as Terminator II, Basic
Instinct, Total Recall and the Rambo series.  The last motion
picture provided to the Company by Carolco or its affiliates was
Cutthroat Island, which was released on home video in April 1996. 
Because of the Carolco bankruptcy and the fact that the output
agreement between the Company and Carolco expired in 1995 in any
event, the Company does not expect to receive any additional films
from Carolco in the future.
                                    
     Carolco has sold its film library and certain related assets
to Canal+ D.A.  In connection with the sale, the Company and
Carolco have stipulated that certain contracts between the Company
and Carolco relating to the distribution by the Company of the
video rights to films produced by Carolco, and the distribution by
Carolco in foreign territories of films owned by LIVE, would be
assumed by Canal+ D.A. after the library sale is completed. 
Portions of the distribution agreements between the Company and
Carolco pertaining to LIVE's right to remakes and sequel rights to
films in the Carolco library, however, were severed from the
distribution portions of the agreements and were rejected by
Carolco in the bankruptcy proceedings.  This has left LIVE with a
damage claim in the Carolco bankruptcy, the recovery of which
cannot be reasonably estimated at this point in time.
                                    
New Distribution Agreements
                                    
     On February 8, 1996, the Company and Pioneer LDC, Inc.
("PLDC") entered into an Output Deal Agreement (the "Pioneer Output
Agreement") for the distribution of the Company's theatrical
productions in Japan.  The three year agreement includes all
theatrical films that LIVE produces and acquires over the period,
excluding two of LIVE's features released in 1996, The Substitute
and The Arrival.  PLDC has agreed to pay a specified percentage of
the applicable film's production or acquisition cost to obtain such
Japanese distribution rights.  PLDC is an affiliate of the
Company's controlling shareholder, Pioneer Electronic Corporation. 
                                    
     In addition, on February 14, 1996, the Company and Orion
Pictures Corporation ("Orion") entered into a Multiple Picture Deal
Output Agreement (the "Orion Agreement") for the theatrical
distribution by Orion in the United States and Canada of a limited
number of the Company's theatrical productions.  The Orion
Agreement provided for Orion to theatrically release during 1996,
for certain distribution fees, five motion pictures acquired or
produced by LIVE.  Subsequent to the release of the fifth picture
in October 1996, the Orion Agreement ended and the Company has now
established its own in-house theatrical distribution system.  See
Entertainment Production, Marketing and Distribution Operations -
General, for a further description of titles included in the Orion
Agreement and a discussion of the Company's theatrical distribution
operation.
                                    
Income Tax Audits
                                    
     The Company is currently under examination by the Internal
Revenue Service ("IRS") for the years ended 1989 through 1994 and
by the California Franchise Tax Board for the years ended 1988
through 1990.  In connection with their examination the Company has
received certain proposed adjustments from the IRS for the 1989
through 1991 tax years, the impact of which may be to significantly
increase the Company's taxable income and related tax liability in
certain years under examination.  The Company is in the process of
analyzing the proposed adjustments, alternatives available to the
Company and the potential impact the proposed adjustments will
have.  While the outcome of the examination is unknown, in the
fourth quarter of 1996 the Company recorded an additional provision
for income taxes and interest there on related to the years under
examination of approximately $7,100,000.  Based on the most recent
discussions between the Company and the tax authorities the Company
believes that, with the additional provision for income taxes
recorded in 1996, it has provided adequate reserves to cover its
income tax liabilities at December 31, 1996.  The payment date of
the potential income tax liabilities accrued as of December 31,
1996 related to the proposed IRS audit adjustments is not known at
this time, but may ultimately occur in the 1997 fiscal year.
                                    
Management Changes
                                    
     Since the beginning of 1996, Anthony J. Scotti, Masao Nomura,
R. Timothy O'Donnell, Frans Afman and Roger Smith have resigned
from or decided not to stand for reelection to the Board of
Directors, and Messrs. Melvin Pearl, Charles MacDonald, Michael Jay
Solomon, Akira Niijima, Eiji Orii, Charles Yamarone and Makoto
Koshiba have been elected or appointed as Directors.  The
departures of Messrs. Scotti, Nomura, O'Donnell, Afman and Smith
from the Board of Directors were not the result of any dispute with
the Company.
                                    
Entertainment Production, Marketing and Distribution Operations
                                    
General
                                    
     Historically, the operations of the Company and VCL focused on
the acquisition and distribution of home video programming in the
United States and Canada (through LFM) and in German-speaking
Europe (through VCL), by marketing and distributing videocassettes
to wholesalers, retailers and consumers directly.  LIVE controls
the United States and Canadian home video rights (hereinafter
referred to as "domestic home video rights") and certain
international and television rights to a catalog in excess of 2,000
titles, inclusive of approximately 1,000 titles acquired from
Vestron Inc. ("Vestron") in 1991.  (Vestron was an independent home
video supplier with approximately 1,000 titles in its catalog,
including such titles as Dirty Dancing, Platoon, Hoosiers, the
Smithsonian Series, the National Audubon Series and others, and the
rights to exploit all sequels to Dirty Dancing.)  Vestron is now a
label owned and distributed by the Company.
                                    
     As an independent distribution company, the Company acquires
distribution rights to programming from a variety of sources,
including production companies and independent producers. 
Distribution rights which the Company may acquire include (a)
domestic: theatrical, home video, free television, pay television
(including cable and pay-per-view), and electronic publishing, and
(b) international: all media.  The Company often acquires the
rights to completed motion pictures.  However, in order to secure
rights to motion pictures which might not otherwise be available to
the Company (such as international, television and interactive),
and to acquire a wider array of distribution rights on more
favorable terms, the Company also secures the rights to motion
pictures prior to or during production.  
                                     
     During the past few years the Company has found it
increasingly difficult to acquire just the domestic home video
rights to quality motion picture productions on terms the Company
believed to be commercially attractive.  This trend was exacerbated
by the bankruptcy of Carolco, its most reliable source of A+ motion
picture product, and by the acquisition by major studios of a
number of independent production and distribution companies from
whom the Company had acquired video rights in the past, such as New
Line Cinema Corporation and Miramax Pictures.  Thus, in early 1994,
the Company announced plans to expand its business activities into
the theatrical release of a limited number of motion pictures and
the direct licensing of international, television rights and other
ancillary rights to third parties rather than through
intermediaries.  Further, in late 1994, the Company released its
first interactive product through its newly formed interactive
division.  
                                    
      Examples of this activity include the Company's acquisition
of all rights to films which are intended to have worldwide appeal,
yet take advantage of the Company's historical strength in the
domestic home video market.  In 1995 the Company entered into
agreements to acquire, upon completion, two major theatrical motion
pictures, The Substitute, an action thriller directed by Robert
Mandel and starring Tom Berenger, Ernie Hudson, Glenn Plummber, and
Diane Venora, and The Arrival, writer/director David Twohy's sci-fi
thriller, with Charlie Sheen, Ron Silver, Terri Polo, and Lindsay
Crouse.  The two pictures were released in the United States
theatrical market in early 1996 through Orion, who was responsible
for the United States and Canadian theatrical distribution of a
package of five pictures produced by the Company under the Orion
Agreement through 1996.  See "Recent Developments for the Company -
New Distribution Agreements."  Other motion pictures produced or
acquired by the Company and released theatrically by Orion through
this package deal include the hit German comedy Maybe...Maybe Not
("Der Bewegte Mann"), which has garnered acclaim in festivals
worldwide and stars Til Schweiger, Trees Lounge, written and
directed and starring indie film favorite Steve Buscemi, with an
ensemble cast including Anthony LaPaglia, Chloe Sevigny and cameos
by Mimi Rogers, Daniel Baldwin, and Carol Kane, among others, with
a special appearance by Samuel Jackson, and Phat Beach, a black hip
hop comedy.
                                    
     To make all-rights acquisitions, the Company frequently
becomes involved with, and has active input on, projects at the
earliest possible date, from development through physical
production and completion of the finished film, and generally may
have input over all key production elements.  Even with the
Company's involvement in the early production stages of a film's
development, it will continue to be difficult to predict the
theatrical acceptance of any particular motion picture the Company
may acquire or produce.  The theatrical results of a motion picture
is a significant factor in generating revenues in all media,
including home video.
                                    
     In 1996, the Company engaged Orion to handle the theatrical
distribution of its films.  Orion had the infrastructure to book,
bill, collect and service the exhibition community that LIVE did
not possess.  LIVE retained control over marketing decisions and
responsibility for the theatrical releasing costs.  The Company
believes it experienced significant distribution quality and
targeted penetration problems, occurring occasionally in this type
of relationship with a third party distribution arrangement.  In
order to address these problems, reduce the overall cost to the
Company for such distribution services,  and take advantage of
additional opportunities that a LIVE owned and operated theatrical
distribution system could provide, the Company made the decision to
bring the domestic theatrical distribution operation in-house in
1997.  This decision was made after detailed cost/benefit analysis,
and will thus allow the Company to better control and exploit the
theatrical distribution of its filmed product.  LIVE anticipates
releasing between six to ten theatrical films each year, with eight
releases planned in 1997.  The first such film released under
LIVE's theatrical distribution system was the limited regional
release "Hotel de Love" in January 1997.  Other theatrical releases
in 1997 include "Dead Men Can't Dance", "Critical Care" (directed
by Sidney Lumet and starring James Spader and Albert Brooks),
"Wishmaster" (produced by Wes Craven), "Boys Night Out" (starring,
Christopher Walken, Denis Leary and Sean Patrick Flannery) and "The
Winner" (starring Rebecca DeMornay).  In addition, this decision
may provide an additional revenue stream to the Company in that
other independent film producers can utilize LIVE's theatrical
distribution system in a typical "rent-a-system" deal.  Under this
arrangement, LIVE will service such films theatrically with little
or no risk, and collect a fee for doing so.  In many cases this may
provide opportunities for the Company to distribute these films in
other media such as in the television and international markets. 
                                    
The United States Motion Picture Industry
                                    
     The United States motion picture industry encompasses the
production and theatrical exhibition of feature-length motion
pictures and the subsequent distribution of such pictures in home
video, television and other ancillary markets.  The industry is
dominated by the major studios, including Universal Pictures,
Warner Bros., Twentieth Century Fox, MGM, Sony Pictures
Entertainment (including Columbia Pictures and Tri-Star Pictures),
Paramount Pictures and The Walt Disney Company, which historically
have produced and distributed the majority of theatrical motion
pictures released annually in the United States.  There are also a
large number of smaller production companies that produce
theatrical motion pictures and have played an important role in the
production of motion pictures for the worldwide feature film
market.
                                    
     The "majors" generally own their production studios and have
national or worldwide distribution organizations.  Major studios
typically release films with direct production costs ranging from
$10,000,000 to $100,000,000 or more and provide a continual source
of motion pictures to the nation's theater exhibitors.  The
independents do not own production studios and, with certain
exceptions, have more limited distribution capabilities than the
major studios.  Independents typically produce fewer motion
pictures at substantially lower average production costs than major
studios.  
                                    
Motion Picture Financing and Production
                                    
     The Company is involved in the production and financing of a
variety of motion pictures.  The typical cost of a motion picture
produced by a major studio for wide release averages more than
$36,000,000.  The Company intends to keep its average production
budget to less than $20,000,000, although it may spend more for
titles it believes to have significant commercial potential. 
Production costs consist of acquiring or developing the screenplay,
film studio rental, cinematography, post-production costs and the
compensation of creative and other production personnel. 
Distribution expenses, which consist primarily of the costs of
advertising and release prints, are additional expenses and are not
included in direct production costs.
                                    
     Independent production companies generally avoid incurring the
substantial overhead costs of the majors by hiring creative and
other production personnel and retaining the other elements
required for pre-production, principal photography and post-
production activities on a project-by-project basis.  Unlike the
major studios, the independents also typically finance their
production activities from outside sources rather than out of cash
flow.  Such sources include bank loans, "pre-sales", equity
offerings and joint ventures.  Independents generally attempt to
complete their financing of a motion picture production prior to
commencement of principal photography, at which point substantial
production costs begin to be incurred and require payment.
     
     "Pre-sales" are often used by independent film companies to
finance all or a portion of the direct production costs of a motion
picture.  Pre-sales consist of fees paid to the producer by third
parties in return for the right to exhibit the completed motion
picture in theaters or to distribute it in home video, television,
foreign or other ancillary markets.  Producers with distribution
capabilities, such as the Company, may retain some or all of the
rights to distribute the completed motion picture either
domestically or in one or more foreign markets.  The Company
typically will license a motion picture's foreign rights among
several international licensees under such pre-sale agreements.
                                    
     Both major studios and independent film companies often
acquire motion pictures for distribution through an industry
arrangement known as a "negative pickup," under which the studio or
independent film company agrees to acquire from an independent
production company all rights to a film upon completion of
production.  The independent production company normally finances
production of the motion picture pursuant to financing arrangements
with banks or other lenders in which the lender is granted a
security interest in the film and the independent production
company's rights under its arrangement with the studio or
independent.  When the studio or independent "picks up" the
completed motion picture, it assumes (and in the case of the
Company, most often simply pays) the production financing
indebtedness incurred by the production company in connection with
the film.  In addition, the independent production company is paid
a production fee and generally is granted a participation in the
net profits from distribution of the motion picture.  Examples of
films the Company has recently acquired through negative pickup
arrangements include Critical Care and The Substitute. 
                                    
     Both major studios and independent film companies generally
incur various third-party participations in connection with the
distribution and production of a motion picture.  These
participations are contractual rights of actors, directors,
screenwriters, owners of rights and other creative and financial
contributors entitling them to share in revenues or net profits (as
defined in the respective agreements) from a particular motion
picture.  Except for the most sought-after talent, participations
are generally payable after all distribution and marketing fees and
expenses, direct production costs and financing costs are paid in
full.
                                    
Motion Picture Distribution
                                    
     Motion picture distribution encompasses the exploitation of
motion pictures in theaters and in ancillary markets such as home
video, pay-per-view, pay television, broadcast television, foreign
and other markets.  Motion pictures may continue to play in
theaters for up to six months following their initial release. 
Concurrently with their release in the United States, motion
pictures generally are released in Canada and may also be released
in one or more other foreign markets.  The motion picture then
becomes available for distribution in other markets as follows:
                                    
                                Months After        Approximate
                                Initial Release     Release Period
        
Domestic home video             4-6  months         ----
Domestic pay-per-view           4-6  months         3 months
Domestic pay television         6-10 months         12-21 months
Domestic network/basic cable    30-36 months        18-36 months
Domestic syndication            30-36 months        3-15 years
Foreign home video              6-12 months         ----
Foreign television              18-24 months        18-30 months

     The distributor typically acquires rights from the producer to
distribute a motion picture in one or more of the markets described
above.  The distributor typically agrees to advance the producer a
non-refundable minimum royalty or guarantee, which is to be
recouped by the distributor out of profits generated from the
distribution of the motion picture in whatever markets it has
acquired.  Generally, the producer also is entitled to receive a
participation equal to an agreed-upon percentage of all net
revenues received from distribution of the motion picture over and
above the advance once the advance is recouped.  As noted, the
Company in the past generally acquired only domestic home video
rights, but now seeks to control or acquire all rights to films it
produces or licenses from third parties.
                                    
Theatrical Distribution
                                    
     The theatrical distribution of a motion picture involves the
manufacture of release prints, the promotion of the picture through
advertising and publicity campaigns and the licensing of the motion
picture to theatrical exhibitors.  The size and success of the
promotional advertising campaign can materially affect the revenues
realized from the theatrical release of a motion picture.  The
costs incurred in connection with the distribution of a motion
picture can vary significantly, depending on the number of screens
on which the motion picture is to be exhibited, the actual cost and
scope of the media advertising expenditures and campaign and the
ability to exhibit motion pictures during peak exhibition seasons. 
Competition among distributors for theaters during such seasons is
great.  Similarly, the ability to exhibit motion pictures in the
most popular theaters in each area can affect theatrical revenues.
                                    
     The distributor and theatrical exhibitor generally enter into
an arrangement providing for the exhibitor's payment to the
distributor of a percentage of the box office receipts for the
exhibition period, in some cases after deduction of the theater's
overhead, or a flat negotiated weekly amount.  The distributor's
percentage of box office receipts generally ranges from an
effective rate of 35% to over 50%, depending upon the success of
the motion picture at the box office.  Distributors carefully
monitor the theaters which have licensed the picture for exhibition
to ensure that the exhibitor promptly pays all amounts due the
distributor.  Substantial delays in collection are not unusual. 
When the Company acquired all rights to a motion picture having
theatrical potential, it previously engaged the services of a
theatrical distribution company to handle the theatrical exhibition
of the film in the United States.  In the past, the Company has
used the services of MGM Pictures and Orion.  
                                    
     As noted above, in 1997 the Company began to distribute its
own motion picture releases in the United States theatrical market. 
The Company's motion pictures will face significant competition
from films produced and distributed by others without the benefit
of an experienced distributor or proven distribution network.  The
theatrical success of a motion picture can be a significant factor
in generating revenue in other media.  Therefore, there is a
substantial risk that some or all of the Company's projects will
not be commercially successful, resulting in costs not being
recouped or anticipated profits not being realized.  The Company's
film production activities require the initial expenditure of
significant funds, while revenues relating to such films and
programs are generated over an extended period of time.  In
addition, as a result of the Company acquiring film product earlier
in its production stages, the possibility always exists that the
finished product may be different from that which was initially
envisioned.  Theatrical distribution will require an increase in
overhead and the commitment of additional capital resources by the
Company.  No assurances can be given that theatrical distribution
efforts by the Company will be successful.
                                    
     The Company views theatrical distribution of films to be a
source of advertising and promotion to enhance the home video and
other distribution revenues to be received from the film.  The
Company does not believe that theatrical distribution of its motion
picture products will be a source of material profits.  
                                    
Home Video
                                    
     The home video distribution business involves the promotion
and sale of videocassettes and videodiscs to distributors as well
as local, regional and national video retailers (e.g., video
specialty stores, convenience stores, record stores and other
outlets), which then rent or sell such videocassettes and
videodiscs to consumers primarily for private viewing.
                                    
     Major feature films are usually scheduled for release in the
home video market within four to six months after theatrical
release to capitalize on the theatrical advertising and publicity
for the film.  Promotion of new releases is generally undertaken
during the nine to twelve weeks before the release date. 
Videocassettes of feature films are generally sold to domestic
wholesalers at approximately $50 to $60 per unit and generally are
rented by consumers for fees ranging from $1 to $5 per day. 
Wholesalers who meet certain sales and performance objectives may
earn rebates, return credits and cooperative advertising
allowances.  Selected titles, including certain made-for-video
programs, are priced significantly lower (at a wholesale price
ranging from $5 to $19 per unit) to encourage direct purchase by
consumers.  Direct sale to consumers is referred to as the "priced-
for-sale" or "sell-through" market.
                                    
     Overall growth in the domestic home video market has slowed as
growth in the number of new outlets and new VCR homes has
moderated.  The growth in outlets designed to serve the rental
market has remained essentially flat for the past several years,
while the number of new outlets which offer videocassettes and
videodiscs for sale has increased.  The sell-through market
continues to be a seasonal business, except for feature films
initially released on home video at prices generally below $30. 
Furthermore, new technologies which satellite transmission and
telephone companies and others are developing could make competing
delivery systems economically viable and could alter the home video
marketplace.
                                    
     See a more complete description of the Company's home video
distribution operations under "Acquisition of Motion Picture
Distribution Rights by the Company - Domestic Home Video
Distribution Rights."
                                    
Pay-per-view
                                    
     Pay-per-view television allows cable television subscribers to
purchase individual programs, including recently released motion
pictures and live sporting, music or other events, on a "per use"
basis.  The subscriber fees are typically divided among the program
distributor, the pay-per-view operator and the cable system
operator.
                                    
Pay Television
                                    
     Pay television allows cable television subscribers to view
HBO, Cinemax, Showtime, The Movie Channel, Encore and other pay
television network programming offered by cable system operators
for a monthly subscription fee.  The pay television networks
acquire a substantial portion of their programming from motion
picture distributors.
                                    
Broadcast and Basic Cable Television
                                    
     Broadcast television allows viewers to receive, without
charge, programming broadcast over the air by affiliates of the
major networks (ABC, CBS, NBC and Fox), independent television
stations and cable and satellite networks and stations.  In certain
areas, viewers may receive the same programming via cable
transmission for which subscribers pay a basic cable television
fee.  Broadcasters or cable systems operators pay fees to
distributors for the right to air programming a specified number of
times.
                                    
Foreign Markets
                                    
     In addition to their domestic distribution activities, some
motion picture distributors generate revenues from distribution of
motion pictures in foreign theatrical markets, home video,
television and other foreign markets.  There has been a dramatic
increase in recent years in the worldwide demand for filmed
entertainment.  This growth is largely due to the privatization of
television stations, introduction of direct broadcast satellite
services, growth of home video and increased cable penetration.
                                    
Other Markets
                                    
     Revenues also may be derived from the distribution of motion
pictures to airlines, schools, libraries, hospitals and the
military, licensing of rights to perform musical works and sound
recordings embodied in a motion picture, and rights to manufacture
and distribute games, dolls, clothing and similar commercial
articles derived from characters or other elements of a motion
picture.
                                    
New Technologies
                                    
     New means of delivery of entertainment product are constantly
being developed and offered to the consumer.  The exact impact of
emerging technologies such as digital video discs ("DVD"), direct
broadcast satellites, the internet, etc. on the Company's
operations cannot be determined at this time.  However, in its role
as a producer and holder of entertainment copyrights, the Company
is positioning itself to take advantage of whatever delivery
options are available to it, and is constantly monitoring these new
media possibilities.
                                    
Acquisition of Motion Picture Distribution Rights by the Company
                                    
General
                                    
     Distribution rights to motion pictures can encompass various
media (e.g., theatrical, home video, free or pay television,
electronic publishing, CD-ROM, interactive) and various markets or
territories (e.g., the United States and Canada, Great Britain and
Japan).  In the past, the Company generally acquired only home
video rights and not the rights to broadcast or cablecast programs
or to exhibit programs on pay-per-view television or in movie
theaters or similar locations.  Historically, where these other
rights were acquired, the Company exploited them by sublicensing
the rights to third parties whose principal businesses included
exploitation of such rights.  In early 1994, the Company expanded
its business activities into the theatrical distribution of a
limited number of motion pictures and the direct licensing of
international and television rights to third parties rather than
through intermediaries.  Now, where possible, the Company focuses
on the acquisition of worldwide distribution rights to a motion
picture in all media, or, where feasible, distribution rights in
all media for either the North American or international market
places.
                                    
     The Company's decision process in acquiring a finished or an
unfinished movie is similar.  The Company collects information
concerning new motion pictures being contemplated or entering the
production cycle.  This information is obtained from trade sources
and from personal relationships and contacts.  The acquisition
process focuses on productions which seem most likely to fit the
Company's requirements for worldwide marketability and profit
potential.  Before the Company acquires distribution rights for any
motion picture, the Company analyzes  not only the picture's
projected costs, revenues and scheduling, but also the effect of
these assumptions on overall Company performance.  The Foothill
Credit Facility imposes limitations on the size of minimum
guarantees or production or acquisition cost the Company can incur
without the lender's approval.
                                    
     When the Company acquires distribution rights to a motion
picture prior to its production, it controls its development
expenditures by making only limited commitments to advance funds
before completion.  After acquisition of the rights of a motion
picture prior to its production, the Company typically has approval
rights over key product elements and maintains a production
supervisory staff to monitor the production process.  Overhead and
general expenditures are kept at a minimum level, as the Company
does not own any production facilities or significant production
staff.  
                                    
Domestic Theatrical Distribution Rights
                                    
     Historically, LIVE only occasionally acquired theatrical
distribution rights to certain of its films.  However, when such
rights were acquired - for films such as Tom and Jerry - The Movie,
Reservoir Dogs, Bad Lieutenant, American Heart, Light Sleeper and
Bob Roberts, for example - LIVE exploited the rights by
sublicensing them to third parties whose principal businesses was
theatrical distribution of such rights.  Management of the Company
considers the theatrical distribution of a film extremely important
as a marketing tool which enhances video and international sales
and thus LIVE focuses on acquiring theatrical distribution rights
as part of the overall acquisition where possible, even if a film
ultimately will not be released theatrically.  The Company released
theatrically five films during fiscal 1996, including The Arrival,
directed by David Twohy (writer of The Fugitive and Waterworld),
The Substitute, directed by Robert Mandel (director of School Ties,
fx and Big Shots), and Maybe . . . Maybe Not, in the United States
through its relationship with Orion.  The Company generally targets
motion pictures for distribution on a national basis which can
result in substantial amounts being expended for the costs of
national advertising and the manufacturing of initial release
prints.  The exception to this national focus would be that certain
motion pictures be targeted to various demographic audiences, as
opposed to the mainstream public, and such pictures would be
distributed on a more regional, less expensive, basis.  While the
Company does not believe that theatrical distribution of its motion
pictures will be a source of material profits due to the risks
inherent in that business, management of LIVE believes that the
theatrical market has significant upside potential should any
particular film perform well.  It is not uncommon for heavily
advertised films with theatrical losses to have increased
performance in video and other ancillary media that partially or
totally offset such losses.  However, no assurance can be made as
to results with respect to any particular release.
                                    
     The Company is in various stages of post production,
production, development and pre-production on a number of projects,
and intends to have many of these films distributed theatrically in
the United States.  Of those films to which the Company holds
domestic theatrical distribution rights, LIVE intends to release
most through its own new theatrical distribution division.  An
occasional film may be distributed in the future through third
parties.  
                 
Domestic Home Video Distribution Rights
                                    
     LIVE has developed operating strategies which it believes
enhance sales and profit growth potential by focusing on securing
long-term access to commercially viable motion pictures primarily
for video release.  It categorizes the feature films it releases on
video by reference to relative acquisition costs and expected unit
sales.  "A+" titles generally are those films with some combination
of significant box office revenues, established stars, wide
theatrical distribution and/or large budgets.  "A" titles usually
are feature films with cast or other elements which give them a
defined audience appeal and which also receive wide theatrical
distribution.  Those films categorized as "B" titles generally
include a variety of more modestly budgeted films which, if
released theatrically, are done so on a limited or regional basis. 
In addition to motion picture product, the Company also acquires
non-theatrical programming such as sports and fitness programming,
children's programming, special interest products and interactive
programs.
                                    
     Pursuant to various agreements with independent motion picture
producers, the Company released on home video 21 feature film
titles during 1996.  This included the successful video rental
releases of the major motion pictures The Arrival and The
Substitute.  LIVE anticipates releasing on home video a total of
between 35 to 45 feature films in 1997 through 1998.  Management
believes that, under current market conditions, "B" titles
generally will be available at favorable prices on a title by title
basis, either in the pre-production stage or as finished product. 
LIVE also intends to continue to aggressively pursue opportunities
to acquire video rights in children's, budget line and special
interest programming. 
                                    
     In recent years, management of the Company decided to begin
releasing fewer rental titles per month than in prior years for a
number of reasons, among them being:  (a) fewer titles being
purchased by LIVE as a result of lack of availability, and  (b) a
shift in rental market tastes, with a much greater portion of video
store purchases being devoted to theatrically released "A" titles
than direct-to-video or direct-to-television "B" titles. 
Management of the Company has addressed these issues by (i)
reducing its number of rental titles released per month,
particularly the direct-to-video "B" titles, allowing LIVE's
marketing and sales forces to place increased emphasis on a smaller
number of titles, (ii) acquiring more rights to films than only
domestic video rights (including theatrical, television,
international and CD-ROM) and diversifying its business to license
such additional rights directly rather than through intermediaries,
(iii) continuing LIVE's focus on the sell-through business,
exploiting the Company's library of over 2,000 titles including
children's and special interest programs and (iv) attempting to
release a higher percentage of "A" titles by increasing its efforts
to acquire films with greater theatrical release potential.  
                                    
     Management of LIVE believes that the decrease in revenues due
to fewer rental releases per month will eventually be compensated
for through a combination of increased ancillary revenues (such as
theatrical, television, international and CD-ROM) and higher
revenues per rental release due to a combination of increased focus
on fewer titles and a higher percentage of "A" title acquisitions. 
There is no assurance that this will be the case, however. 
                                     
     Domestic home video rights, when acquired under exclusive
licenses without other rights, are typically acquired for a term of
15 years or more, in return for non-refundable advances against
future royalties which are generally based on either a percentage
of the Company's wholesale selling price or a percentage of profit
contribution derived from the sale of videocassettes.  In most
instances, the advance is paid on or after the delivery of the
applicable picture to the Company, which typically occurs six to
twelve months prior to video release.  Furthermore, the licenses
may require the film's producer or distributor to make certain
minimum print and advertising expenditures toward the theatrical
release of the motion picture.  In those instances where the
Company pays a substantial portion of the royalty advance prior to
completion, a completion bond in favor of the Company guaranteeing
that a movie will be finished is almost always required, or the
funds are escrowed or secured by a letter of credit.  Acquisition
costs vary substantially from title to title, depending on the
Company's assessment of the projected demand for the program.
                                    
     LIVE, under its children's programming label, Family Home
Entertainment ("FHE"), has over the years built a substantial
library of children's titles.  FHE  has secured worldwide rights to
release videocassettes of the Teenage Mutant Ninja Turtles animated
television series.  LIVE also has an agreement with Broadway Video
Entertainment granting it home video rights to programs including
Rudolph the Red Nosed Reindeer, Frosty the Snowman, Santa Claus is
Coming to Town, The Little Drummer Boy, Here Comes Peter Cottontail
and Frosty Returns through 1997.  Broadway Video Entertainment
recently sold its family entertainment library to Golden Books
Family Entertainment Inc. and LIVE was unable to renew its license
to distribute these programs when the current agreement expires in
1997.  See a further discussion under "Management's Discussion and
Analysis of Financial Condition and Results of Operations."  In
addition, license agreements have been secured for programming
featuring the products of major toy manufacturers including such
licensed characters as Robotech, Pound Puppies, G.I. Joe,
Transformers, JEM, Mapletown, Velveteen Rabbit, Strawberry
Shortcake, The Mad Scientist, Babar, Care Bears, Bucky O'Hare,
Hello Kitty and Friends, Phantom 2040, Papa Beaver, The Highlander
(animation), Enchanted Camelot, Skysurfer Strike Force, The Bears
Who Saved Christmas, Santa's Christmas Crash, Santa's Christmas
Snooze, Princess Gwenevere, Flash Gordon, The Littlest Pet Shop and
Baryshnikov Stories From Childhood. Management of the Company
intends to continue LIVE's emphasis on building and exploiting its
FHE library.
                                    
     LIVE also distributes non-theatrical products such as the
Smithsonian Series and the Audubon Series.  LIVE distributes music
videos, including those by Michael Jackson, the Rolling Stones and
the Doobie Brothers.  Sports and fitness titles include the PGA
Tour, a Jose Canseco instructional tape and Paula Abdul and Marla
Maples fitness tapes.
                                    
     LIVE maintains its own sales organization which prepares sales
and marketing plans for new release and catalog promotions and
works closely with wholesale distributors, rackjobbers and key
retailers in the United States.  Pursuant to an agreement expiring
in May 1998, Warner/Elektra/Atlantic Corporation ("WEA") handles
all physical aspects of United States distribution, billing and
collections for the Company.  The Company has a similar arrangement
with MCA Canada Ltd., with respect to the Company's Canadian sales,
marketing and distribution activities under an agreement that
expires in 1997, subject to a three year option to extend in favor
of LIVE. 
                                    
Television Distribution Rights
                                    
     Television distribution rights will be acquired by the Company
where available.  Television networks, independent television
networks, television stations and cable system operators generally
license television series, films and film packages (consisting of
theatrically released feature films and made-for-television movies)
pursuant to agreements with distributors or syndicators that allow
a fixed number of telecasts over a prescribed period of time for a
specified cash license fee or for barter of advertising time.  LIVE
distributes the television rights to films it acquires through its
own staff.
                                    
International Distribution Rights
                                    
     International distribution rights include rights in various
media (e.g., television, theatrical and home video) and to various
territories (e.g., the United Kingdom, Japan and the Benelux
nations).  To acquire these rights, the Company is required to pay
a minimum guarantee.  The minimum guarantee, along with specific
recoupable marketing and other expenses, is recovered from the
motion picture's gross revenues before the producer begins to
participate in the net revenues.  Historically, the Company only
occasionally acquired international distribution rights to certain
of its films, mainly through the acquisition of the Vestron
library.  LIVE has for some time maintained a small in-house
international sales staff and utilized outside sales agents to
exploit those rights.  However, often when international rights
were acquired (e.g., for films such as Light Sleeper),  LIVE
exploited the rights by sublicensing them to third parties whose
principal businesses included the further sublicensing of such
rights, and the Company paid a fee for such sublicensing
activities.  In 1996, the Company further expanded its sales force
to manage international sales and to more aggressively promote its
motion pictures at foreign film markets, including the Cannes Film
Festival in France, the American Film Market in Los Angeles and
MIFED in Italy.
                                    
Competition
                                    
     Success in the entertainment marketplace is largely dependent
on a company's ability to acquire rights to programming at
attractive prices and upon the subsequent performance of this
programming in the marketplace.  With the exception of certain
output agreements described above under "Acquisition of Motion
Picture Distribution Rights by the Company; Domestic Home Video
Distribution Rights," the Company generally acquires distribution
rights on a film-by-film basis.  The Company faces significant
competition both in obtaining distribution rights and in selling
products.  The Company's competitors for product acquisitions are
companies such as New Line, HBO and Trimark, and it competes with
these companies as well as major studios in the marketing of its
product.  Certain of the Company's competitors, particularly those
affiliated with major studios or pay television broadcasters, have
significantly greater financial resources than the Company. 
Competition for distribution rights is based primarily on the
amount of the advances which companies are willing to offer to
producers as well as on the producer's perception of the company's
marketing capabilities and its commitment to marketing the release
of a film.
                                    
Regulation Affecting the Company
                                    
     Distribution rights to motion pictures are granted legal
protection under the copyright law of the United States and most
foreign countries, which provide substantial civil and criminal
sanctions for unauthorized duplication and exhibition of motion
pictures.  The Company endeavors to maintain copyright protection
for all its films under the laws of all applicable jurisdictions.
                                    
                                    
     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.  There can be no
assurance, therefore, that current or future restrictions on the
content of Company films may not limit or affect the Company's
ability to exhibit certain of such motion pictures in such media or
markets.
                                    
Factors Which May Affect Results
                                    
     In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company wishes to
caution readers that the following important factors, among others,
in some cases have affected and in the future could affect the
Company's actual results and could cause such results to differ
materially from those expressed in forward-looking statements made
by or on behalf of the Company.
                                    
     Nature of the Entertainment Industry.  The motion picture and
home video industries are highly speculative and historically have
involved a substantial degree of risk.  The success of a motion
picture or video production depends upon unpredictable and changing
factors such as competition and audience acceptance, which may bear
little or no correlation to the Company's production and other
costs.  Audience acceptance of the Company's products represents a
response not only to the artistic components of the products, but
also to the level of advertising and promotion by the distributor,
the availability of alternative forms of entertainment and leisure
time activities, general economic conditions and public taste, and
other intangible factors, all of which change rapidly and cannot be
predicted with certainty.  In addition, as a result of the Company
increasing its resources to film product earlier in its production
and acquisition stages, the possibility always exists that the
finished product may be different from that which was initially
envisioned.  Therefore, there is a substantial risk that some or
all of the Company's products may not be commercially successful,
resulting in costs not being recouped or anticipated profits not
being realized.
                                    
     Competition.  Competition is intense in the motion picture and
video distribution industry.  The Company is in competition with
major entertainment companies which have far greater financial
resources and distribution capabilities than the Company.  The
Company also competes with numerous smaller companies in the
entertainment industry and with other leisure time industries for
the consumer dollar.  There can be no assurance that the Company
will continue to produce and market its products successfully or
that its motion picture and other projects will generate any
profits.
                                    
     Availability of Financing.  The entertainment industry is very
capital intensive.  Average motion picture budgets rise each year
as the cost of talent continues to increase.  The Company's ability
to continue to produce or acquire motion pictures for distribution
is dependent on its ability to finance its activities.  In the past
the Company has experienced difficulties in arranging for adequate
financing.  There is no assurance that the Company will continue to
have adequate financing available to it in the future.
                                    
     Shift in Strategy.  Although members of management of the
Company have prior experience in film production and acquisition of
multiple rights film properties, the Company's decision to increase
its involvement in film production and the acquisition of film
product with multiple rights, to counteract the difficulty in
acquiring only video rights to feature films on attractive terms,
will lead the Company into a business segment where it has a
limited track record.  This shift in strategy toward an increased
emphasis on motion picture production and acquisition may increase
the rewards available to the Company, but may increase the risks as
well.
                                          
     Dependence on Key Personnel.  The Company is dependent on the
efforts and abilities of its senior management, particularly Roger
Burlage, the Company's Chief Executive Officer.  The loss of any of
the Company's key executives could have an adverse effect on the
business and prospects of the Company.
                                    
Major Customers
                                    
     During the year ended December 31, 1994 two customers
accounted for 11.0% and 12.3%, respectively,  of net sales of LIVE; 
during the year ended December 31, 1995 two customers accounted for
17.4% and 16.6%, respectively,  of net sales of LIVE; and during
the year ended December 31, 1996, one customer accounted for 12.5%
of the net sales of LIVE.
                                    
Employees
                                    
     As of February 28, 1997, LIVE had 156 full-time regular
employees and one part-time employee.  None of the Company's
employees are covered by a collective bargaining agreement and the
Company believes that its employee relations are good.
                                    
ITEM 2.   PROPERTIES

     The Company's executive offices are leased in Van Nuys,
California.  The Company believes that its office facilities are
adequate to meet its current and anticipated future needs.
                                    
                                    
ITEM 3.   LEGAL PROCEEDINGS

     LIVE had been the defendant in two purported class action
law suits that were filed in 1992.  The Company had requested the
U.S. District Court to dismiss both cases for non-prosecution due
to the fact that the plaintiffs had taken no action in either of
these cases for over one year. On April 8, 1996, the U.S. District
Court granted LIVE's request and dismissed both cases.
       
     In May 1994, a breach of contract claim was filed against
a subsidiary of the Company, claiming nonpayment of royalties from
licensing of films in foreign territories and deprivation of
royalty payments as a result of misallocation of certain values
asserted with licensed film properties.  Films subject to the
complaint were among the assets of Vestron, Inc. purchased by the
Company in July 1991, and the period covered included the license
periods both prior to, and subsequent to, the acquisition date by
the Company.  The Company filed a reply brief (including a Motion
to Dismiss) on October 5, 1994, and such Motion to Dismiss was
granted on the grounds of forum non conviens.  Plaintiff filed a
complaint in New York on March 22, 1995.  The Company filed its
answer, affirmative defenses and counterclaim on April 20, 1995. 
Plaintiff filed a motion for class certification on September 8,
1995 to which the Company filed its opposition to the motion on
November 6, 1995.  After limited pre-trial discovery, a motion for
class certification was argued on December 6, 1995.  By order dated
June 21, 1996 and filed on June 25, 1996, the Court in this action
determined that the action should be maintained as a class action
under the provisions of Section 901(a) of the New York Civil Practice Law
and Rules.
                                    
     The Company filed an appeal from the Order granting class
certification on July 19, 1996 and filed a Motion for
Decertification of the class on July 24, 1996.  A hearing on the
motion was heard on September 4, 1996 and on December 24, 1996 the
Court denied the Company's Motion for Decertification.  On February 7,  
1997 the Company filed a combined appeal from the order granting
a class certification and the dismissal of the Motion for
Decertification, which will be considered by the New York Sate
Appellate Division in April 1997.

     Management and counsel to LIVE are unable to predict the
ultimate outcome of the above-described actions at this time. 
However, LIVE and the other defendants believe that all these
lawsuits are without merit and intend to defend them vigorously. 
Accordingly, no provision for any liability which may result has
been made in LIVE's consolidated financial statements.  In the
opinion of management, these actions, when finally concluded and
determined, will not have a material adverse effect upon LIVE's
financial position or results of operations.
                                    
        Other than as described above, there are no material legal
proceedings to which LIVE or any of its subsidiaries are a party
other than ordinary routine litigation in the ordinary course of
business.  In the opinion of management (which is based in part on
the advice of outside counsel), resolution of these matters will
not have a material adverse impact on LIVE's financial position or
results of operations.
                                    
                                    
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of the Company's security
holders during the fourth quarter of the Company's fiscal year
ended December 31, 1996.
                                    
                                 
                               PART II


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

Market Prices

     On June 21, 1996, the Company's Common Stock was listed with,
and has since been traded on, the Nasdaq National Market System
("Nasdaq/NMS") under the symbol "LIVE."  Between January 17, 1995
and June 20, 1996, the Company's Common stock was traded on the
Nasdaq Small Cap Market.  From October 11, 1994 until January 17,
1995 the Company's Common Stock traded on the over the counter
market.  Prior to that date the Company's Common Stock was listed
on the New York Stock Exchange.  As of February 28, 1997, there
were 1,123 holders of record of the Company's Common Stock.  As of
the same date, 2,448,267 shares of the Company's Common Stock were
outstanding out of 24,000,000 shares authorized. 

     The following table sets forth for the periods indicated the
high and low sales prices for the Company's Common Stock. 

                       Year Ended December 31, 1995

Quarter Ended                          High                Low  

March 31, 1995 . . . . . . . . . .    $4.000              $3.000
June 30, 1995. . . . . . . . . . .     5.000               3.500
September 30, 1995 . . . . . . . .     4.375               3.500
December 31, 1995. . . . . . . . .     4.625               2.375

                       Year Ended December 31, 1996

Quarter Ended                          High                Low  

March 31, 1996 . . . . . . . . . .    $5.250              $2.750
June 30, 1996. . . . . . . . . . .     6.875               4.875
September 30, 1996 . . . . . . . .     6.000               3.250
December 31, 1996. . . . . . . . .     4.250               3.750

Cash Dividends

     The Company has never paid cash dividends on its Common Stock,
which in part has been due to restrictions imposed by debt
instruments.  The Board of Directors expects that it will continue
to retain all earnings for use in the Company's business except as
required to be paid on the Series B Preferred Stock and the
Company's Series C Convertible Preferred Stock ("Series C Preferred
Stock").  As of February 28, 1997, the Company had accrued (but not
paid) approximately $3,078,000 of dividends on its Series C
Preferred Stock, which represent accrued dividends through December
31, 1996. 
<PAGE>
ITEM 6.   SELECTED FINANCIAL DATA

     The following table sets forth the selected financial data and
other operating information of LIVE and is derived from the audited
consolidated financial statements of LIVE.  The data should be read
in conjunction with the consolidated financial statements, related
notes and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this
Form 10-K.  Certain re-classifications were made to the financial
information from 1992 through 1995 to conform to the 1996
presentations. 

<TABLE>                                                               
<CAPTION>
                                             Year Ended December 31,                
                                1992         1993         1994(3)     1995(3)    1996  
                                   (Amounts in Thousands, Except Per Share Data)
<S>                             <C>          <C>          <C>         <C>        <C>
Summary of Operations           
Net sales (1). . . . . . . . .  $160,953     $143,735     $117,205    $140,112   $151,425 
Operating (loss) profit. . . .    (4,854)     (21,177)      (6,174)     10,826      4,034 
Interest income (expense), net   (14,424)      (6,264)      (3,300)        565        529 
(Loss) income from continuing 
operations  . . . . . . . . .    (17,460)     (28,209)      (9,674)     10,791      4,563 
(Loss) income from 
discontinued operations . . .      1,090      (22,083)        (100)         --         -- 
Extraordinary item  . . . . .      3,967           --           --          --         -- 
Net (loss) income   . . . . .    (12,403)     (50,292)      (9,774)     10,791     (3,437)
Primary
 (Loss) income per common share: 
  Continuing operations. . . .   (8.20)(2)    (13.15)(2)    (8.05)(2)    1.34(2)   (3.03)(2)
  Discontinued operations. . .     .45         (9.15)       (0.04)         --         --  
  Extraordinary item . . . . .    1.65            --           --          --         --  
                                $(6.10)(2)   $(22.30)(2)  $ (8.09)(2) $  1.34(2) $ (3.03)(2)
Fully Diluted
  Continuing operations. . . .   (8.20)(2)    (13.15)(2)    (8.05)(2)     .53(2)   (3.03)(2)
  Discontinued operations. . .     .45         (9.15)       (0.04)         --         --  
  Extraordinary item . . . . .    1.65           --            --          --         --  
                                $(6.10)(2)   $(22.30)(2)  $ (8.09)(2) $   .53(2) $ (3.03)(2)
</TABLE>
                                                               
<TABLE>                           
<CAPTION>
                                                     December 31,                        
                                                               
                                1992         1993         1994(3)     1995(3)    1996
                                                 (Amounts in Thousands)
<S>                             <C>          <C>         <C>         <C>        <C>
Selected Financial Data
Cash and net receivables . .    $ 33,183     $ 44,790    $ 26,214    $ 46,057   $ 49,898
Inventories. . . . . . . . .      48,961       10,124       7,842       4,813      6,206
Total assets . . . . . . . .     297,048      253,549     156,794     149,445    143,757
Total obligations. . . . . .     207,989      242,807     121,077     111,425    115,290
Total stockholders' equity .      89,059       10,742      35,717      38,020     28,467
               
<FN>
(1)  Net sales do not include sales of VCL of $31,560,000,
     $28,511,000, $22,712,000 and $32,527,000 for the years ended
     December 31, 1992, 1993, 1994 and 1995, respectively.
(2)  Income (loss) per common share in 1992, 1993, 1994, 1995 and
     1996 is net of preferred dividends of $2,397,000, $3,589,000,
     $3,791,000, $3,027,000, and $3,952,000, respectively, and, for
     1994 and 1995, is also net of accretion in the redemption
     value of the Series B Preferred Stock of $6,000,000 and 
     $4,509,000, respectively.
(3)  The table does not include financial data of the Company's
     Specialty Retail Division, which consisted of its formerly
     wholly owned subsidiary, Strawberries Inc. ("Strawberries")
     and Strawberries' wholly owned subsidiary, Waxie Maxie Quality
     Music Co. ("Waxie Maxie"), subsequent to their sale in August
     1994.
</FN>
</TABLE>

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

Results of Operations

     Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Continuing Operations

     Net sales of LIVE increased to $151,425,000 during 1996
compared to $140,112,000 during 1995.  The increase of $11,313,000,
or 8.1%, is primarily attributable to theatrical and international
sales including sales of The Substitute and The Arrival and
increased television revenue in 1996.  The increase was partially
offset by a decrease in video rental sales.  The Company's home
video division released 21 rental titles during 1996 compared to 24
rental titles in 1995.  

     Gross profits of LIVE decreased $3,222,000 or 11.9%, to
$23,865,000 during 1996 compared to $27,087,000 during 1995.  As a
percentage of sales, gross profit decreased to 15.8% during 1996
from 19.3% during 1995.   The decrease in both gross profit dollars
and as a percentage of sales is primarily the result of lower gross
profits being generated on the Company's 1996 theatrical releases.

     Selling, general and administrative expenses of LIVE increased
$658,000, or 4.3%, to $15,907,000 during 1996 compared to
$15,249,000 during 1995.  As a percentage of sales, the amount
decreased to 10.5% during 1996 from 10.9% during 1995.  The dollar
increase is primarily a result of increased overhead costs
associated with expansion of the Company's business into
theatrical, international and television operations.  The decrease
as a percentage of sales is primarily due to increased sales in
1996.

     Interest and other income decreased $366,000 or 15.1% to
$2,058,000 during 1996 compared to $2,424,000 during 1995, which
was primarily the result of a decrease in interest earned on cash
on hand. 

     Interest expense of LIVE decreased $330,000, or 17.8%, to
1,529,000 during 1996 compared to $1,859,000 during 1995.  Included
in interest expense for the year ended December 31, 1995 is
$563,315 related to the increase in the interest rate on the LIVE
Increasing Rate Notes from 10% to 12% per annum, which was provided
for in an amendment to the Indenture governing the LIVE Increasing
Rate Notes.  The interest rate increase on the LIVE Increasing Rate
Notes was to occur in March 1996, and such interest from and after
that date is included in the carrying value of the LIVE Increasing
Rate Notes in accordance with Financial Accounting Standards Board
Statement No. 15, Accounting for Debtors and Creditors for Troubled
Debt Restructuring and therefore not included in interest expense. 
The decrease was partially offset by interest incurred on amounts
outstanding under the WEA distribution agreement.

     Preferred dividends of $3,952,000 in 1996 and $3,027,000 in
1995 represent the cash dividend accrued on both the Series B
Preferred Stock (5% to May 1, 1996 and 10% thereafter) and the
Series C Preferred Stock (5%), as well as, in the case of the
Series C Preferred Stock, additional 5% dividends on accrued but
unpaid dividends.

     The effective income tax rate for 1996 was 175.3% compared to
an effective tax rate of 5.3% for 1995.  The significant increase
is primarily due to the Company recording an additional provision
for income taxes of $7,100,000 in 1996 as a result of certain
adjustments proposed by the Internal Revenue Service in connection
with its examination of the Company's 1989 through 1991 tax
returns.

     Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Continuing Operations

     Net sales of LIVE increased to $140,112,000 during 1995
compared to $117,205,000 during 1994.  The increase of $22,907,000,
or 19.5%, is primarily attributable to a stronger video rental
release schedule  and increased sell-through sales in 1995.  This
included increased sales on such sell-through promotions as a
Terminator package and the seasonal Christmas product, and also the
successful rental and sell-through release of Stargate (which
accounted for approximately 25% of the Company's net sales for the
year), for which there was no comparable title released in 1994. 
The Company's home video division released 24 rental titles during
1995 compared to 23 rental titles in 1994.  The increase in revenue
is also attributable to increased theatrical, television and
international revenues in 1995.

     Gross profits of LIVE increased $11,663,000, or 75.6%, to
$27,087,000 during 1995 compared to $15,424,000 during 1994.  The
increase in gross profit dollars was primarily related to the
increase in rental and sell-through sales noted above.  As a
percentage of sales, gross profit increased to 19.3% during 1995
from 13.2% during 1994, primarily due to higher sales and margins
generated in 1995 primarily from the release of Stargate and
certain sell-through promotions.

     Selling, general and administrative expenses of LIVE decreased
$2,424,000, or 13.7%, to $15,249,000 during 1995 compared to
$17,673,000 during 1994.  As a percentage of sales, the amount
decreased to 10.9% during 1995 from 15.1% during 1994.  The dollar
and percentage decrease is primarily a result of LIVE recording a
reserve in 1994 of approximately $1,560,000 against a receivable
owed to LIVE by Carolco Pictures, Inc. ( Carolco ) and the recovery
of a previously written off bad debt from a former distributor of
approximately $1,000,000 in 1995.

     Interest and other income decreased $268,000 or 10.0% to
$2,424,000 during 1995 compared to $2,692,000 during 1994, which
was primarily the result of a decrease in interest earned on cash
on hand and letters of credit issued to secure film acquisitions in
1994.

     Interest expense of LIVE decreased $4,133,000, or 69.0%, to
$1,859,000 during 1995 compared to $5,992,000 during 1994. 
Interest expense decreased as a result of the repayment of
$37,000,000 of 12% Subordinated Secured Notes due 1994 (the "12%
Notes") during September and October of 1994 and a decrease in the
amortization of loan costs in 1995.  

     Preferred dividends of $3,027,000 in 1995 and $3,791,000 in
1994 represent the 5% cash dividend accrued on both the Series B
Preferred Stock and the Series C Preferred Stock, as well as, in
the case of the Series C Preferred Stock, additional 5% dividends
on accrued but unpaid dividends.

     The effective income tax rate for 1995 was 5.3% compared to an
effective tax rate of 2.1% for 1994, primarily due to the Company
having income from continuing operations of $11,391,000 (1995) as
compared to a loss from continuing operations of $9,474,000 (1994).

Discontinued Operations

     As a result of the Board of Directors' decision to dispose of
the Company's interests in VCL, the results of operations for VCL
have been restated to account for the sale of VCL as a disposal of
a portion of a line of business.  Accordingly, a provision for
losses during the phase-out period totaling $3,885,000 for VCL had
been accrued and accounted for at December 31, 1993 and was not
included in the results of operations for 1994 and 1995.  In
November 1995, the Company and certain of its affiliates, on the
one hand, and Datty Ruth, the owner of 19% of VCL, and Apricot
Computer GmbH (Apricot), on the other, consummated a transaction
whereby the Company s 81% interest in VCL, as well as all
receivables owed by VCL to the Company or its affiliates, was
transferred to Ruth and Apricot.  The total consideration received
by the Company and its affiliates in connection with such
transaction was approximately $7,444,000, of which approximately
$3,100,000 was received in February 1995.  The remaining $4,344,000
was received in November 1995. The Company reflected a gain of
approximately $2,913,000 in the quarter ended September 30, 1995,
resulting from the completion of this transaction.

     Net sales of VCL increased to $32,257,000 during 1995 compared
to $22,712,000 during 1994.  The increase of $9,545,000, or 42.0%,
was due primarily to a stronger release schedule in 1995.  For the
year ended December 31, 1994, net revenues, operating profits and
identifiable assets relating to foreign operations were
$26,629,000, $2,945,000 and $33,262,000, respectively.  For the
years ended December 31, 1995, net revenues and operating profits
relating to foreign operations were $32,257,000 and $8,775,000
respectively.

Liquidity and Capital Resources

     Historically, the Company has funded its operations through a
combination of cash generated from operations, bank borrowings,
advances from distributors under distribution agreements and the
proceeds from the issuance of debt instruments.  For the year ended
December 31, 1996 the Company generated negative cash flow from
operations of approximately $3,863,000 primarily due to an increase
in accounts receivable associated with the 1996 releases. 

     Operating results of the Company can be significantly affected
in any one reporting period by the amount, quality, and
availability of film properties available for exploitation. 
Movement of release and availability dates of films from one
quarter to another quarter, or year to year, can have a material
impact on the planned and potential operating results for the
periods affected.  As a result of the apparent lack of a
particularly significant film release in the first two quarters of
1997, the Company does not anticipate reporting net income for
those periods.

     The Company is party to an agreement with Broadway Video
Entertainment ("BVE") that granted the Company certain home video
rights to certain Christmas and other seasonal video programs. 
This agreement expires at the end of 1997.  BVE recently sold its
family entertainment library to Golden Books Family Entertainment
Inc. and LIVE was unable to renew its license to distribute these
programs when the current agreement expires.  Programs under this
contract provided approximately 9.7% of the Company's total net
revenues for 1996 and 1995, and approximately 16.7% and 13.3% of
the company's gross profit for 1996 and 1995, respectively.

     The Company is currently under examination by the Internal
Revenue Service ("IRS") for the years ended 1989 through 1994 and
by the California Franchise Tax Board for the years ended 1988
through 1990.  In connection with their examination the Company has
received certain proposed adjustments from the IRS for the 1989
through 1991 tax years, the impact of which may be to significantly
increase the Company's taxable income and related tax liability in
certain years under examination.  The Company is in the process of
analyzing the proposed adjustments, alternatives available to the
Company and the potential impact the proposed adjustments will
have.  While the outcome of the examination is unknown, in the
fourth quarter of 1996 the Company recorded an additional provision
for income taxes and interest there on related to the years under
examination of approximately $7,100,000.  Based on the most recent
discussions between the Company and the tax authorities the Company
believes that, with the additional provision for income taxes
recorded in 1996, it has provided adequate reserves to cover its
income tax liabilities at December 31, 1996.  The payment date of
the potential income tax liabilities accrued as of December 31,
1996 related to the proposed IRS audit adjustments is not known at
this time, but may ultimately occur in the 1997 fiscal year.

     On May 27, 1995, LIVE entered into a three year extension of
its distribution agreement with Warner-Elektra-Atlantic Corporation
("WEA").  Under the terms of the agreement, WEA advanced
$10,000,000 to LIVE, recoupable from distribution revenues during
the three year term of the agreement at $277,778 per month, plus
interest at LIBOR plus 0.2%.   On October 21, 1996 LIVE amended the
distribution agreement, effective as of May 7, 1996, whereby LIVE
assumed responsibility of all sales and sales solicitation services
which were previously the responsibility of WEA.  The amendment
also included a reduction in certain distribution fees charged by
WEA, as a result of the shift in sales and sales solicitation
responsibility, and an additional advance to LIVE of $10,000,000. 
The additional advance is recoupable from distribution revenues
during the remaining term of the agreement at $476,190 per month
plus interest at LIBOR + 0.2%.  In order to obtain the advances,
LIVE granted WEA a second priority security interest in
substantially all of LIVE's assets.  As of December 31, 1996, there
was $13,571,000 outstanding under the advance, and the interest
rate on the advance at December 31, 1996 was 5.44%.

     Investing activities generated a negative cash flow of
$510,000 during the year ended December 31, 1996, primarily as a
result of the acquisition of property and equipment at LIVE. 

     LIVE experienced negative cash flows from financing activities
of $3,162,000 during the year ended December 31, 1996 primarily due
to the repurchase of 377,500 shares of the Company's Series B
Preferred Stock, interest and principal  payments on long term
obligations and payment of dividends on the Series B Preferred
Stock. 

     LIVE and its affiliates are a party to a three-year
$30,000,000 revolving credit facility with Foothill Capital
Corporation (the "Foothill Credit Facility") that expires in
November 1997.  In March 1997, an amendment was entered into that
extended the expiration date of the Foothill Credit Facility, under
the existing terms, to March 1, 1998.  Borrowings available under
the Foothill Credit Facility are limited to $27,500,000 until
additional participant lenders are added to the Facility, at which
time the borrowings available will be increased to a maximum
$30,000,000.  Borrowings under the Foothill Credit Facility are
secured by substantially all of the assets of LIVE and its
affiliates.  Outstanding borrowings under the Foothill Credit
Facility bear interest at the rate of 2% per annum above the
highest of the Bank of America, Mellon Bank or Citibank prime rate,
payable monthly.  In no event will interest under the Foothill
Credit Facility be less than 7% per annum.  The Foothill Credit
Facility provided for a closing fee of $500,000, an annual facility
fee of 1/4 of 1% and a commitment fee of 1/4 of 1% on any unused
amount.  The Foothill Credit Facility also requires LIVE to meet
certain financial ratios, and as of December 31, 1996 the Company
was in compliance with all such financial ratios.  There were no
amounts outstanding under the Foothill Credit Facility as of
December 31, 1996.

     The Company has not borrowed any funds under the Foothill
Credit Facility since it was obtained in November 1994, and the
Company has had substantial cash balances throughout the 1995 and
1996 fiscal years.  As a result of the Company's upcoming
anticipated cash expenditures relating to theatrical releases and
production/acquisition schedules for the remainder of 1997, it is
expected that the cash balances on hand will be utilized and the
Company will have to draw funds against its credit facility to meet
its anticipated future cash expenditures.  This will reduce the
liquidity of the Company in 1997 when compared to the 1995 and 1996
cash and borrowing positions.  In connection with the Equity
Rationalization, the Company is seeking to replace and expand the
existing credit facility, which would provide the Company with
increased liquidity over a term beyond November of 1997 and allow
it to fulfill its present business plan.  If such efforts to secure
an expanded facility are unsuccessful, the Company believes it will
be able to extend the existing credit facility or find alternative
credit facility sources in order to allow it to continue its
business operations, although in a slightly reduced capacity.

     Dividends on the Series C Preferred Stock, at the rate of 5%
per annum on the unreturned $15,000,000 liquidation value of the
Series C Preferred Stock, are due on June 30 and December 31 of
each year.  Although the dividends scheduled to be paid on June 30
and December 31 of 1993, 1994, 1995 and 1996 were accrued by LIVE,
those dividends were not paid due to restrictions imposed on LIVE
by the terms of the Series B Preferred Stock, which prohibit the
payment of dividends on the Series C Preferred Stock unless the
aggregate amount of such dividends, together with all cash
dividends paid on the Series B Preferred Stock, does not exceed the
net income of LIVE (adding back specified net worth exclusions)
since the March 23, 1993 date of issuance of the Series B Preferred
Stock and Series C Preferred Stock.  LIVE has had a cumulative
consolidated net loss for the period subsequent to March 23, 1993. 
Thus, pursuant to the terms of the Series B Preferred Stock, LIVE
was prohibited from paying the June 30 and December 31, 1993, 1994,
1995 and 1996 cash dividends on the Series C Preferred Stock which,
together with accrued and unpaid dividends thereon, totaled
approximately $3,078,000 as of December 31, 1996.

     The unpaid Series C Preferred Stock dividend itself bears a
dividend of 5% per annum, and is due on the next regularly
scheduled dividend payment date for the Series C Preferred Stock. 
LIVE intends to pay the June 30 and December 31, 1993, 1994, 1995
and 1996 dividends, plus the additional dividends thereon, as soon
as it has sufficient net income to permit such payment to occur or
as soon as the Series B Preferred Stock has been redeemed, provided
that such payment does not impair the capital of LIVE and is
permitted under the Delaware General Corporation Law ("DGCL").

     As of December 31, 1996, the aggregate redemption price for
the Series B Preferred Stock was $38,198,000 ($10.00 per share). 

     Although LIVE has no obligation to redeem any Series B
Preferred Stock, subject to the availability of funds and the prior
approval of its Board of Directors and its lenders, LIVE may
acquire shares of its Series B Preferred Stock from time to time,
either through private purchases or through open market purchases. 
Through December 31, 1996, LIVE acquired, and subsequently retired,
a total of 2,177,500 shares of the Series B Preferred Stock at an
average price of $4.27 per share.

     On August 21, 1996 the Company filed a Schedule 13E-4 with the
Securities and Exchange Commission which outlined the Equity
Rationalization.  In addition, the Company is seeking to replace
its existing $30,000,000 Foothill Credit Facility with a larger
working capital facility, and to refinance its current outstanding
$40,000,000 LIVE Increasing Rate Notes.   The Company continues to
negotiate financing terms for an exchange offer.  In addition, 
the Company has been approached about a possible transaction involving
the sale of the entire Company.  Any such transactions would be subject
to a number of conditions, and there is no assurance that either of these
transactions, or any other transactions, will be finalized or completed.
The Company believes that the Equity Rationalization, if completed, will
simplify its existing complex capital structure, provide additional
liquidity for growth and expansion, and reduce the cash dividend
cost of its existing equity securities.

     Failure of the Company to consummate an equity rationalization
plan at this time would require the Company to begin accumulating
cash to retire the LIVE Increasing Rate Notes, of which $20,000,000
are due in 1998 and the remaining $20,000,000 in 1999, and would
therefore reduce the funds available for the Company's operations. 
This would include analyzing all opportunities of accumulating
cash, including eliminating the cash outlays relating to dividend
payments, reducing expenditures on film production and acquisition
and general operating overhead.

     The completion of the Equity Rationalization is subject to
completing satisfactory documentation for refinancing sources of
senior and subordinated debt, approval by the Company's Board of
Directors, shareholders and regulatory agencies, completion of
legal documentation, and acceptance of the tender offer if and when
made.  As such, no assurances can be given that the Company's
efforts will be successful.

Impact of Inflation and Other Matters

     The inflation rate in recent years has been negligible.  Where
manufacturers have increased prices, the Company generally has been
able to pass on such price increases within 90 to 180 days.  As a
result, inflation has not had a material impact on the results of
operations.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The index to Consolidated Financial Statements of the Company
is included in Item 14.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

<PAGE>
                                 
                              PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth information with respect to the
Directors and executive officers of the Company as of February 28,
1997.

     Name             Age           Position

Jay Burnham           34            Director
Makoto Koshiba        53            Director
Jonathan D. Lloyd     44            Director
Charles MacDonald     38            Director
Akira Niijima         52            Director
Ryuichi Noda          62            Director
Eiji Orii             38            Director
Melvin Pearl          61            Director
Gregory R. Pierson    38            Director
Michael Jay Solomon   59            Director
Charles A. Yamarone   38            Director
Roger A. Burlage      54            Director; Chairman of the
                                    Board and Chief Executive
                                    Officer of the Company and
                                    LIVE Film and Mediaworks Inc. ("LFM")
Ronald B. Cushey      40            Director; Executive Vice
                                    President/Chief  Financial
                                    Officer and Corporate
                                    Secretary of the Company and LFM
Paul Almond (1)       54            Executive Vice President/Production and
                                    Acquisitions of LFM
Steven E. Mangel (1)  43            Executive Vice President/Legal and Business
                                    Affairs and General Counsel of LFM
Elliot Slutzky (1)    48            Executive Vice President/Sales and 
                                    Marketing of LFM
Ann Dubinet (1)       41            President of International
                                    Distribution of LFM
Robert L. Denton      37            Senior Vice President/Chief
                                    Accounting Officer of the
                                    Company and LFM 
____________
(1) Executive officers of LFM who were determined by the Board to
    be executive officers of the Company by virtue of the policy
    making functions that they perform for the Company.

    Mr. Burlage has served as President and Chief Executive
Officer of LIVE and LFM since January 1994, became a Director of
the Company in December 1994 and Chairman of the Board in March
1996.  From 1989 until joining LIVE, Mr. Burlage served as
President and Chief Executive Officer of Trimark Holdings, Inc.
("Trimark"), a diversified entertainment company.  Prior to joining
Trimark, Mr. Burlage served in several other capacities in the
entertainment industry, including positions with New World
Pictures, Ltd. ("New World") and with AVCO Corporation and AVCO
Embassy Pictures.

    Mr. Burnham, a Director of the Company since June 1993, has
been an investment analyst with DDJ Capital Management ("DDJ"), a
diversified investment management firm, since March 1, 1996.  From
January 1, 1995 until he joined DDJ, Mr. Burnham was a Vice
President of Libra Investments, Inc. ("Libra"), a specialized
investment banking firm.  From June 1990 until he joined Libra, Mr.
Burnham performed investment analyst services for Paul D. Sonz
Partners, a diversified investment services firm.  From August 1987
until June 1990, he was an investment analyst with Columbia Savings
and Loan Association, a financial savings institution.  Mr. Burnham
is a Director of Bally's Las Vegas, a hotel and gaming
establishment located in Las Vegas, Nevada.

    Mr. Koshiba has been a Director of the Company since May 1995
and has been General Manager of the Finance Division of Pioneer
since August 1993.  From September 1991 to August 1993, Mr. Koshiba
served as Executive Vice President, Secretary and Treasurer of
Pioneer Electronics Capital Inc., a company engaged in the business
of providing financing to the United States Pioneer companies. 
From August 1985 to September 1991, Mr. Koshiba was Secretary and
Treasurer of Pioneer Electronics (USA) Inc., a company engaged in
sales and marketing of consumer electronics in the United States.

    Mr. Lloyd, a Director of the Company since June 1993, is
currently Managing Director of Mandeville Partners, LLC, a venture
capital and investment banking concern concentrating in
telecommunications and media.  From 1993 to July 1995, Mr. Lloyd
was the Chairman, President and Chief Executive Officer of OpTel,
Inc. ("OpTel"), a company engaged in the provision of cable
television services.  Prior to joining OpTel, Mr. Lloyd was the
President of Qintex Entertainment, Inc. ("Qintex"), a company
engaged in the development and production of television
programming, a position he held from January 1990 until he became
President of OpTel.  From April 1988 to January 1990, Mr. Lloyd was
the Executive Vice President and Chief Financial Officer of Qintex. 
From January 1986 to April 1988, Mr. Lloyd was Executive Vice
President and Chief Financial Officer of Hal Roach Studios, Inc.,
a producer and distributor of television programming and home video
product.

    Mr. MacDonald became a Director of the Company on May 2, 1996. 
He is an individual investor performing investment analysis and
managing a portfolio of stocks, high yield bonds and limited
partnerships.  From November 1987 to July 1995, Mr. MacDonald was
a Securities Analyst and Portfolio Manager for Elliott Associates,
L.P., a New York based investment management firm.  From June 1985
to October 1987, Mr. MacDonald worked for Chemical Bank as an
associate in the Equities Group.  Mr. MacDonald also serves as a
director of Bio-Technology General Corp.

    Mr. Niijima became a Director of the Company on July 11, 1996. 
Mr. Niijima joined Pioneer in April 1969.  In October 1995 he was
named President of Pioneer North America, Inc. ("PNA"), and is
responsible for corporate planning, shareholder relations and legal
matters involving PNA and its subsidiaries.

    Mr. Noda became a Director of the Company in December 1994. 
Mr. Noda became President of Pioneer LDC, Inc. ("PLDC"), a
subsidiary of Pioneer, in April 1991 and has been a Director of
Pioneer since December 1988.  From October 1988 to April 1991, he
was Deputy General Manager of the International Division of
Pioneer.  From January 1986 until October 1988, he was President
and Chief Executive Officer of Pioneer Electronics (USA) Inc.  From
1985 to 1986, he served as General Manager of the Planning and
Coordination Department of the International Division of Pioneer. 
Mr. Noda also served as a Director of Carolco Pictures Inc.
("Carolco"), a diversified entertainment company engaged in the
financing, production and leasing of motion picture properties
worldwide, until his resignation from Carolco's Board on November
10, 1995.  In November 1995, Carolco filed for reorganization under
Chapter 11 of the United States Bankruptcy Code. 

    Mr. Orii became a director of the Company on February 18,
1997.  He has been the Manager of the Corporate Planning Division
of PLDC since 1996, after serving as Manager of the Planning
Administration Section, International Division, of PLDC since 1995. 
From 1991 to 1995 Mr. Orii was the Manager of Corporate Planning
and Budget Control, of Pioneer LDCE Limited in the United Kingdom.

    Mr. Pearl become a director of the Company on May 2, 1996.  He
is a senior partner in the law firm of Katten Muchin & Zavis and
was one of its founding partners in June, 1974.  In 1984, Mr. Pearl
formed his own production company and has been an active film
producer in addition to his practice of law.  Mr. Pearl is Chairman
of DDM Film Corp. which has produced both small and large-budgeted
films.  He is a member of the Board of Directors, the Executive
Committee and former Chairman of the Compensation Committee, of
Cole Taylor Financial Group.  He is also a member of the Board of
Guarantee Reserve Life Insurance Company.

    Mr. Pierson became a Director of the Company in April 1994. 
Mr. Pierson has been the General Counsel of PNA since 1991.  From
1985 to 1991, Mr. Pierson was an attorney with the law firm of
Adams, Duque & Hazeltine in Los Angeles.  Mr. Pierson also served
as a Director of Carolco, until his resignation from Carolco's
Board on November 10, 1995.  In November 1995, Carolco filed for
reorganization under Chapter 11 of the United States Bankruptcy
Code. 

    Mr. Solomon is Chairman and Chief Executive Officer of Solomon
Broadcasting International ("SBI"), a Beverly Hills, California-
based international communications company he founded in 1994.  SBI
consists of a network of worldwide production and distribution
companies, as well as broadcasting, satellite and cable program
delivery services in various parts of the world.  From 1989 to
1994, Mr. Solomon was President of Warner Bros. International
Television and from 1985 until its 1989 merger with Warner Bros.,
he served as President of Lorimar Telepictures Corporation
("Lorimar").  In 1978, Mr. Solomon founded Telepictures Corporation
and held the position of Chairman and Chief Executive Officer,
prior to its merger with Lorimar.

    Mr. Yamarone become a Director of the Company on May 2, 1996. 
He has been Executive Vice President of Libra Investments, Inc., a
broker-dealer located in Los Angeles, California, since July 1994. 
Mr. Yamarone was Senior Vice President and General Counsel of Libra
Investments, Inc. from October 1991 to June 1994.  Mr. Yamarone was
Senior Vice President-Legal of Columbia Savings and Loan, Beverly
Hills, California, from January 1990 to October 1991 and was also
Secretary of Columbia Savings and Loan from January 1990 to January
1991.  Mr. Yamarone also serves as a Director of Continental
Airlines, Inc. and El Paso Electric Company.

    Mr. Cushey has served as Executive Vice President and Chief
Financial Officer of LIVE and LFM since January 1995.  He became a
Director of the Company on November 9, 1993 and served in that
capacity until May 9, 1995, when he was replaced by Mr. Koshiba. 
Mr. Cushey subsequently was reappointed as a Director in June 1995,
when Mr. White resigned from the Board.  Mr. Cushey was an
Executive Consultant for PNA from April 1992 until December 1994. 
He served as Chief Financial Officer of Nelson Holdings
International Ltd. and Nelson Entertainment Group (collectively,
"Nelson") from January 1989 until June 1991, after serving as
Nelson's Acting Chief Financial Officer since November 1987.

    Mr. Almond was named Executive Vice President, Acquisitions
and Productions, of LFM in January 1994.  From 1986 until joining
LFM, Mr. Almond was Senior Vice President, Worldwide Acquisitions
at ITC Entertainment Group, an international motion picture
production and distribution company.

    Mr. Mangel has served as Executive Vice President of LFM and
its subsidiaries since July 1994 and currently supervises the
Company's legal and business affairs department, and acts as its
General Counsel.  Previously, Mr. Mangel served as General Counsel
and Senior Vice President/Legal and Business Affairs since August
1989 after serving as its Vice President since January 1986.  From
1979 until joining LFM, Mr. Mangel was a private practitioner,
specializing in copyright and entertainment law, becoming a member
of the law offices of Shapiro and Mangel in 1984.

    Mr. Slutzky was named Executive Vice President, Sales and
Marketing of LFM in February 1994.  From 1989 until his appointment
at LFM, Mr. Slutzky was President, Marketing and Distribution, for
Epic Productions, Inc. and Vision International.

    Ms. Dubinet  was named President of International Distribution
of LFM in September 1996.  From 1990 until her appointment at LFM,
Ms. Dubinet was President of Island Pictures International and its
predecessor, World Films.

    Mr. Denton has served as Senior Vice President of Finance and
Chief Accounting Officer of LIVE and LFM since March 1996, after
serving as Vice President and Chief Accounting Officer since July
1990.  From 1982 until joining LIVE, Mr. Denton was employed by the
accounting firm of Ernst & Young LLP, most recently as Senior
Manager.

Arrangements Pursuant to Which Certain Directors Have Been Elected

    By the terms of the Certificate of Designations, Preferences
and Relative, Participating, Optional or Other Special Rights of
the Outstanding Preferred Stock, the holders of the Outstanding
Preferred Stock, voting as a class, are entitled to elect four
Directors of the Company, and more in certain events.  Messrs.
Burnham, Lloyd, Yamarone and MacDonald have been elected Directors
by the holders of the Outstanding Preferred Stock.  If the Company
is successful in its attempts to complete the Equity
Rationalization as described under "Business - Recent Development
for the Company" the terms of the members of the Board elected by
the holders of the Outstanding Preferred Stock will end at the
Closing of the Equity Rationalization.  

    COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

    Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's Directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity
securities, to file with the Commission and The Nasdaq Stock Market
initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company.  Officers,
Directors and greater than ten percent stockholders are required by
Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file.

    To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and written
representations that no other reports were required, during the
year ended December 31, 1996 all Section 16(a) filing requirements
applicable to its officers, Directors and greater than ten-percent
beneficial owners were complied with. 

ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth the cash compensation paid by
the Company during the fiscal years ended December 31, 1996, 1995
and 1994 to Mr. Burlage, who has served as the Chief Executive
Officer of the Company from January 1994 and to its four most
highly compensated executive officers other than the Chief
Executive Officer at December 31, 1996.  As of the end of the
fiscal year ended December 31, 1996, there were only two executive
officers of the Company (Mr. Burlage and Ronald B. Cushey).  Mr.
Cushey became Executive Vice President and Chief Financial Officer
of the Company in January 1995, and Paul Almond, Steven Mangel and
Elliot Slutzky - all executive officers of LFM - were named as
executive officers of the Company effective as of January 1, 1995
by virtue of the policy making functions that they perform for the
Company.  Messrs. Burlage, Cushey, Almond, Mangel and Slutzky are
referred to herein as the "Named Executives."

     Following the Summary Compensation Table are certain
additional charts and tables detailing other aspects of the
compensation of the Named Executives including (a) an Option Grants
Table that includes information regarding individual grants of
options made to the Named Executives during fiscal 1996 along with
the potential realizable values of such options, and (b) a Fiscal
Year End Option Table that indicates whether any of the Named
Executives exercised options in fiscal 1996, and including the
number and value of unexercised options held by the Named
Executives at December 31, 1996.

<TABLE>                  SUMMARY COMPENSATION TABLE
<CAPTION>                                                                            
                                                                                  Compensation
                                       Annual Compensation                        Awards (1)
                                                                    Other
                                                                    Annual        Securities   All Other
                                                                    Compen-       Underlying   Compen-
Name and                                                            sation        Options/     sation
Principal Position             Year      Salary($)    Bonus($)      ($)(2)        SARs(#)      ($)
<S>                            <C>       <C>          <C>           <C>           <C>          <C>  
Roger A. Burlage               1996      $518,798     $250,000 (4)  $30,291 (5)    31,000      $ 4,500 (6)
 Chief Executive               1995       493,269       25,000 (7)   47,064 (5)   121,000           --  
 Officer (3)                   1994       432,692      100,000 (8)   84,213 (9)        --           --

Ronald B. Cushey               1996       209,231       55,650 (10)      --        11,000        4,500 (6)
 Executive Vice President/     1995       182,692       15,000 (7)       --        22,000           -- 
 Chief Financial Officer       1994 (12)       --           --           --         5,000           --  
 and Corporate Secretary

Elliot Slutzky                 1996       298,269       75,525 (10)      --        29,000        4,500 (6)
 Executive Vice President/     1995       283,846       25,000 (7)       --        15,000           --  
 Sales and Marketing of LFM    1994 (12)       --           --           --            --           --  

Steven E. Mangel               1996       279,300       72,345 (10)      --         8,000        8,850 (11)
 Executive Vice President/     1995       266,000       25,000 (7)       --        14,000       15,156 (11)
 Legal and Business Affairs    1994 (12)       --           --           --            --           --  
 and General Counsel of LFM

Paul Almond                    1996       221,248       54,325 (10)      --        28,000        4,500 (6)
 Executive Vice President/     1995       203,654       15,000 (7)       --        12,000           --  
 Production and                1994 (12)       --           --           --            --           -- 
 Acquisitions of LFM
 
<FN>          
 (1)     The column for long-term incentive plan payouts has been
         omitted because no such payouts were made to any of the Named
         Executives during any fiscal year covered by this Table.

 (2)     Perquisites and other personal benefits are not included to
         the extent they do not exceed the lesser of either $50,000 or
         10% of the total of annual salary and bonus for the Named
         Executive.

 (3)     Mr. Burlage became Chief Executive Officer of the Company in
         January 1994.

 (4)     A cash bonus payment of $250,000 made to Mr. Burlage in
         February 1996 in recognition of the Company's improved profits
         for the year ended December 31, 1995.

 (5)     Represents $19,000 paid for life insurance for Mr. Burlage's
         benefit in each of 1995 and 1996 in addition to the life
         insurance benefits provided to all employees of the Company,
         and other amounts, each equaling less than 25% of the total
         perquisites and other personal benefits provided to Mr.
         Burlage, for the following costs: reimbursement for automobile
         leasing costs, imputed interest on a loan, disability
         insurance in addition to the disability insurance benefits
         provided to all employees of the Company and country club
         dues.

 (6)     Represents a matching contribution under the LIVE Incentive
         Savings Plan.

 (7)     Represents a bonus paid in recognition of the Named
         Executive's efforts in connection with the collection of a
         previously written off bad debt by the Company.  

 (8)     Represents a signing bonus paid for signing a four year
         employment agreement with the Company.

 (9)     Represents $35,000 paid for life insurance for Mr. Burlage's
         benefit in addition to the life insurance benefits provided to
         all employees of the Company, and other amounts, each equaling
         less than 25% of the total perquisites and other personal
         benefits provided to Mr. Burlage, for the following costs:
         reimbursement for automobile leasing costs, disability
         insurance in addition to the disability insurance benefits
         provided to all employees of the Company, country club dues,
         reimbursement of legal fees and imputed interest on a loan of
         $29,500 made by the Company to Mr. Burlage to enable Mr.
         Burlage to obtain a country club membership, which loan is
         repayable by Mr. Burlage upon any termination of his
         employment relationship with the Company.

(10)     Represents a cash bonus payment made to the Named Executive in
         February 1996 under the Company's Fiscal 1995 Corporate
         Incentive Cash Compensation Program (the "1995 Bonus
         Program").  

(11)     Represents matching contribution in the amount of $4,500 in
         each of 1995 and 1996 under the LIVE Incentive Savings Plan
         and in 1996 $4,350 paid for life insurance for Mr. Mangel's
         benefit and in 1995 a $10,656 cash payment in lieu of taking
         accrued vacation time.

(12)     Mr. Cushey, Mr. Slutzky, Mr. Mangel and Mr. Almond were not
         Named Executive officers prior to January of 1995.
</FN>
</TABLE>
        
    The following table sets forth certain information regarding
the Chief Executive Officer and the other Named Executives
identified in the Summary Compensation Table.

<TABLE>                 OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
<CAPTION>                                                      
                                                                           Potential Realizable Value
                                                                           at Assumed Annual Rates 
                                                                           of Stock Price Appreciation
                            Individual Grants                              for Option Term 

                                % of
                                Total
                                Options/
                                SARs
                     Options/   Granted to    Exercise
                     SARs       Employees     or Base          Expir-
                     Granted    in Fiscal     Price            ation          
Name                 (#)        Year (1)      ($/Share) (2)    Date (3)    5% ($) (4)     10% ($) (4)
<S>                  <C>        <C>           <C>              <C>         <C>            <C>      
Roger A. Burlage     31,000     11.3%         $3.25            2/07/06     $89,609        $200,773
Ronald B. Cushey     11,000      4.0%          3.75            9/12/06      26,442          66,242
Elliot Slutzky       29,000     10.6%          3.75            9/12/06      72,393         177,319
Steven E. Mangel      8,000      2.9%          3.25            2/07/06      22,867          51,812
Paul Almond          28,000     10.2%          3.75            9/12/06      70,034         171,343
           
<FN>
(1) Total of 274,400 granted.

(2) The closing price of the Company's Common Stock on The Nasdaq
    Stock Market's National Market on December 31, 1996 was $3.75. 
    Amounts indicated represent highest exercise or base price of
    options granted to this individual in the fiscal year ended
    December 31, 1996.

(3) Dates indicated represent latest expiration date of any option
    granted to this individual in the fiscal year ended December
    31, 1996.

(4) Based upon the number of shares of the Company's Common Stock
    outstanding as of December 31, 1996, a 5% and 10% increase in
    the annual rates of stock price appreciation over the option
    term would result in an aggregate increase of $5,773,882 and
    $14,632,151 respectively, in the value of the Common Stock
    held by all the Company's Common Stockholders (assuming no
    exercise of warrants, other stock options or conversion of
    Series B Preferred Stock or Series C Preferred Stock).
</FN>
</TABLE>

    The following table sets forth certain information regarding
option exercises and option values for the Chief Executive Officer
and the other Named Executives identified in the Summary
Compensation Table.

          AGGREGATE OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR
                   AND FISCAL YEAR-END OPTION/SAR VALUES

                                                Number of
                                                Securities     Value of
                                                Underlying     Unexercised
                                                Unexercised    In-the-Money
                                                Options/SARs   Options/SARs
                                                at FY-End (#)  at FY-End ($)
                   Shares Acquired   Value      Exercisable/   Exercisable/
Name               on Exercise (#)   Realized   Unexercisable  Unexercisable(1)

Roger A. Burlage           -0-          --        62,000 (E)      $19,500 (E)
                                                  90,000 (U)       26,250 (U)

Ronald B. Cushey           -0-          --        14,500 (E)        7,625 (E)
                                                  23,500 (U)        3,375 (U)

Elliot Slutzky             -0-          --         5,700 (E)        1,425 (E)
                                                  38,300 (U)        6,325 (U)

Steven E. Mangel           -0-          --         7,000 (E)        1,750 (E)
                                                  15,000 (U)        5,750 (U)

Paul Almond                -0-          --         6,000 (E)        1,500 (E)
                                                  34,000 (U)        5,500 (U)
           

 (1)     Amount represents the difference between the aggregate
         exercise price and the aggregate market price of applicable
         options as of December 31, 1996.
<PAGE>
Board Fees
      
Directors Fees

    During 1996, all Directors of the Company were entitled to
receive non-qualified options to acquire 1,000 shares of the
Company's Common Stock for service as a Board member.  All
Directors of the Company who are not employed by the Company are
also entitled to receive an annual fee of $10,000 plus $1,000 for
attendance at each committee meeting.  

    Former Chairman of the Board Anthony J. Scotti receives
$25,000 per month for services rendered as Chairman of the Board of
Directors of the Company, and will receive $25,000 per month
through June 1997 for services as a consultant to the Chairman of
the Board after his resignation as Chairman in March 1996.  Mr.
Scotti received no other Annual Meeting or committee fees for his
service on the Board.

Arrangements with Board Members

    On March 6, 1995, the Stock Option Committee of the Board
granted to all current employees and Directors of LIVE and LFM
(other than members of the Stock Option Committee) who were holders
of options pursuant to the 1988 Plan, the option to cancel certain
options (the "Canceled Options") and to receive in return therefor
new options (the "New Options") pursuant to the 1988 Plan, all on
the following terms and conditions: (i) the exercise price for the
New Options would equal $3.50, the closing price of the Common
Stock on the Small Cap Market on March 6, 1995, (ii) fifty percent
(50%) of the New Options would vest on March 6, 1996; the remainder
would vest on March 6, 1997, provided that no New Options would
vest earlier than the scheduled vesting date for the corresponding
Canceled Options, and (iii) all New Options would expire on the
expiration date of the corresponding Canceled Options.

Compensation Committee Interlocks and Insider Participation

    During the fiscal year ended December 31, 1996, the following
Board members served on the Company's Compensation Committee: 
Messrs. Pierson, Pearl and Solomon.  During the fiscal year ended
December 31, 1996, none of the members of the Compensation
Committee were officers or employees of LIVE or any of its
subsidiaries.  Furthermore, none of the members of the Compensation
Committee are former officers of LIVE or any of its subsidiaries. 
The Company or its subsidiaries had the following relationships and
transactions with members of the Board and the Compensation
Committee, and/or their affiliates.

Arrangements with Mr. Scotti or Affiliates

    The Company and former Chairman of the Board Anthony J. Scotti
are parties to an agreement dated December 1993, pursuant to which
the Company agreed, for a term ending in December 1996, to pay Mr.
Scotti $25,000 per month, plus normal Directors expenses and other
out-of-pocket expenses he may incur in connection with his services
to the Company, in return for Mr. Scotti making himself available
to the Company or any video subsidiary thereof to act as Mr.
Burlage's primary reporting person for the period ending December
31, 1996.  Such compensation is payable as long as Mr. Scotti makes
himself available for such purpose, whether or not the Company
actually utilizes his services and whether or not Mr. Burlage
remains in the Company's employ.  The agreement was amended in
March 1996 upon Mr. Scotti's resignation to provide for his
consulting services to the Chairman of the Board through June 1997
at the same rate.

Arrangements with Mr. Afman or Affiliates

    In July 1994, the Company entered into an agreement with
affiliates of former Director Frans Afman whereby such affiliates
agreed to provide services with respect to the international
licensing of film rights held by the Company.  The fees payable to
the affiliates of Mr. Afman are based on the license fee paid for
such rights by unaffiliated third parties.  Such affiliates of Mr.
Afman also are entitled to be reimbursed for certain expenses they
incur in connection with the services they perform under the
agreement.  

Arrangements with Mr. Pierson, Mr. Niijima, Mr. Noda, Mr. Koshiba
and Mr. Orii, or their Affiliates

    Pioneer and Pioneer USA

    Pursuant to an agreement dated October 1995, which amended and
extended an original agreement dated October 1991,  LFM granted
Pioneer USA a license for United States laser videodisc rights to
LFM's library of motion pictures (subject to certain reserved
rights) for a term ending in September 1998.  Pioneer USA paid LFM
a total of $4,600,000 ($2,300,000 in March 1996 and $2,300,000 in
August 1996) under this agreement as a non-returnable advance
recoupable on a cross-collateralized basis from all royalties
payable to LFM under the agreement.  

    On February 8, 1996, the Company and PLDC entered into an
Output Deal Agreement (the "Pioneer Output Agreement") for the
distribution of the Company's theatrical productions in Japan.  The
three year agreement includes all theatrical films that the Company
produces and acquires over the period, excluding LIVE's two
recently released features, The Substitute and The Arrival.  PLDC
has agreed to pay a specified percentage of the applicable film's
production or acquisition cost to obtain such Japanese distribution
rights.

    Pioneer is the owner of all of the Series C Preferred Stock. 
The Series C Preferred Stock bears dividends at the rate of 5% per
annum, payable semi-annually on January 1 and July 1.  The semi-
annual dividends on the Series C Preferred Stock scheduled to be
paid to Pioneer on July 1, 1993, January 1 and July 1, 1994, 1995
and 1996, and January 1, 1997 were not paid due to restrictions on
the Company imposed by the terms of the Outstanding Preferred
Stock.  Under the terms of the Certificate of Designations,
Preferences and Rights of the Series C Preferred Stock, any accrued
but unpaid dividends on the Series C Preferred Stock are added to
the liquidation preference of the Series C Preferred Stock on the
semi-annual payment date.  

    Under the terms of the Certificate of Designations,
Preferences and Relative, Participating, Optional or Other Special
Rights of the Outstanding Preferred Stock, the Company is
prohibited from paying dividends on any junior series of the
Company preferred stock, including the Series C Preferred Stock,
other than from the cumulative net income of LIVE from and after
the date of issuance of the Outstanding Preferred Stock (March 23,
1993).  LIVE has had a cumulative net loss since March 23, 1993 and
thus has been prohibited from paying dividends on the Series C
Preferred Stock.  As a result of such non-payment, the unreturned
liquidation preference of the Series C Preferred Stock increased to
$18,077,929 as of January 1, 1997.  

    The Series C Preferred Stock is convertible into that number
of shares of Common Stock that is equal to the unreturned
liquidation preference of the Series C Preferred Stock divided by
$15.225.  Thus, as of January 1, 1997, the Series C Preferred Stock
was convertible into 1,187,384 shares of Common Stock.

    In July 1993, LIVE granted Pioneer, Le Studio Canal+ S.A. ("Le
Studio") and RCS Video International Services B.V., a former
shareholder, ("RCS") the right to require LIVE to use its best
efforts to register all Common Stock in the Company owned by either
Pioneer, Le Studio or RCS, whether acquired directly from the
Company, upon conversion of the Series C Preferred Stock, or upon
acquisition of such stock from Carolco pursuant to the financial
restructuring of Carolco that occurred in October 1993. 

    In July 1994, a subsidiary of LIVE and an affiliate of Pioneer
reached an agreement whereby an affiliate of Pioneer received the
Japanese theatrical, video and television distribution rights to
the films Wagons East, Top Dog, The Beans of Egypt, Maine and Goldy
III.

    Carolco

    Pioneer owned approximately 41% of the outstanding voting
equity of Carolco prior to its bankruptcy in 1995.  Le Studio and
its affiliates own approximately 17% of the outstanding voting
equity of Carolco.  RCS and its affiliates owned approximately 5.8%
of the outstanding voting equity of Carolco.  On November 10, 1995
Carolco filed for protection from its creditors under the
provisions of the United States Bankruptcy Court.

    LIVE was party to an agreement with Carolco entitling the
Company to acquire home video rights in the United States and
Canada for most motion pictures produced or controlled by Carolco
on which principal photography had commenced prior to July 31, 1995
or for which the Company had paid an advance to Carolco prior to
such date, under a series of agreements.  In 1995, LFM made no
payments to Carolco and at December 31, 1995 had no recorded
contractual obligations under the Domestic Master Agreement, other
than nominal normal royalty overage amounts.

    LIVE, through its former subsidiary, LIVE Entertainment
International Inc. ("LEII"), was party to an agreement with Carolco
International Inc. ("CII") entitling LEII to acquire home video
rights in the German-speaking European market for most motion
pictures produced or controlled by CII on which principal
photography had commenced prior to July 31, 1995 or for which LFM
had paid an advance to CII prior to such date (other than rights
granted by CII to other parties prior to April 1991), under a
master agreement entered into in April 1991 (the "German Master
Agreement").  In 1995, LEII did not pay any advances to CII and at
December 31, 1995 had no recorded contractual obligations under the
German Master Agreement.  

    In January 1995, in order to settle disputes between them with
respect to the ownership of the United States and Canada video
distribution rights to the film Cutthroat Island, the Company and
Carolco reached agreement that Cutthroat Island would not be
subject to either the Domestic Master Agreement or the German
Master Agreement.  LIVE also reached agreement with the distributor
of Cutthroat Island whereby the Company obtained video distribution
rights to such film in the United States and Canada, and Carolco
made certain payments to the Company to compensate the Company for
the fact that its distribution fee under the Cutthroat Island video
distribution agreement was less favorable to the Company than the
terms of the Domestic Master Agreement.

    In connection with a former class action litigation involving
the Company, Carolco and certain of the Company's past and present
Directors and executive officers, the Company and Carolco entered
into an agreement dated April 8, 1992, with respect to the division
of legal fees and costs relating to that litigation.  Pursuant to
the agreement, 65% of the legal fees and costs will be paid by the
Company and 35% of the legal fees and costs were to be paid by
Carolco.  As Carolco failed to pay certain of Carolco's costs, LIVE
has paid approximately $25,000 on behalf of Carolco with respect to
those costs.  

    The Company believes that each transaction with an affiliate
of the Company was on terms at least as favorable to the Company as
would have prevailed in arms-length transactions between unrelated
parties.  In addition, future transactions between the Company and
its affiliates will be referred to either the Company's Board or a
committee of disinterested Directors to ensure that the interests
of the Company are protected in any such transaction.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

    The following table sets forth as of February 28, 1997,
certain information concerning the ownership of shares of Common
Stock and Series C Preferred Stock.  The Series C Preferred Stock
votes on an as converted basis on all matters which may come before
the holders of Common Stock, voting together on such matters with
the Common Stock.  As of February 28, 1997, the Series C Preferred
Stock was convertible into 1,187,384 shares of Common Stock
(including accrued but unpaid dividends through December 31, 1996). 
Information is provided concerning the ownership of Common Stock
and Series C Preferred Stock by (i) the holders known to the
Company of more than 5% of the outstanding shares of Common Stock
or Series C Preferred Stock, (ii) each executive officer and
Director of LIVE and (iii) all executive officers and Directors of
LIVE as a group.

    The table includes each person's, entity's and group's
beneficial ownership of Common Stock calculated in accordance with
Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and includes shares of Common Stock
issued and outstanding as of February 28, 1997, as well as shares
for which beneficial ownership may be acquired within 60 days of
that date.  In accordance with Rule 13d-3(d)(1) under the Exchange
Act, any securities not outstanding but which are the subject of
options, warrants, rights, or conversion privileges (or other
arrangements which could result in the issuance of additional
shares of Common Stock by LIVE) exercisable within 60 days of
February 28, 1997, are deemed to be outstanding for the purpose of
computing the percentage of Outstanding Preferred Stock of the
class owned by such person, but are not deemed to be outstanding
for the purpose of computing the percentage of the class owned by
any other person.

    Certain members of the Board named in the table are affiliated
with one of the beneficial owners of more than 5% of the Common
Stock or Series C Preferred Stock (a "5% Owner").  In certain
circumstances, a 5% Owner may be deemed to beneficially own Common
Stock or Series C Preferred Stock held by such Directors, and vice
versa.  For purposes of the table below, (i) the beneficial
ownership of a 5% Owner includes such Director's ownership where
indicated by footnote even though the 5% Owner may disclaim
beneficial ownership of such shares and (ii) the beneficial
ownership of the Director does not include such 5% Owner's
beneficial ownership solely by reason of such Director's
affiliation with such 5% 
Owner.


   BENEFICIAL OWNERSHIP OF COMMON STOCK AND SERIES C PREFERRED STOCK [update]

                                            Amount of Beneficial Ownership of
                                       Common Stock as of February 28, 1997 (1)
         Name of Beneficial Owner or
            Identity of Group                   Number of Shares        Percent

                5% Owners         
Pioneer . . . . . . . . . . . . . . .             1,833,228 (2)           50.3%
Le Studio (3) . . . . . . . . . . . .               257,606                7.1%
Elliott Associates, L.P. (4). . . . .               255,067                6.6%
Merrill Lynch & Co., Inc. (5) . . . .               232,430                6.0%
FMR Corp (6). . . . . . . . . . . . .               190,894                5.0%
 
                Management          
Roger A. Burlage (7). . . . . . . . .               107,000                2.9%
Jay Burnham (8) . . . . . . . . . . .                 4,000                   * 
Ronald B. Cushey (9). . . . . . . . .                15,000                   * 
Ryuichi Noda (10) . . . . . . . . . .                 2,000                   * 
Makoto Koshiba (11) . . . . . . . . .                 2,000                   * 
Jonathan D. Lloyd (12). . . . . . . .                 4,000                   * 
Charles MacDonald (13). . . . . . . .                 1,000                   * 
Akira Niijima (14). . . . . . . . . .                 1,000                   * 
Eiji Orii (15). . . . . . . . . . . .                     0                   * 
Melvin Pearl (16) . . . . . . . . . .                 6,000                   * 
Gregory R. Pierson (17) . . . . . . .                 3,000                   * 
Michael Jay Solomon (18). . . . . . .                 1,000                   * 
Charles A. Yamarone (19). . . . . . .                 2,846                   * 
Paul Almond (20). . . . . . . . . . .                14,667                   * 
Steve Mangel (21) . . . . . . . . . .                16,801                   * 
Elliot Slutzky (22) . . . . . . . . .                20,067                   * 
Ann Dubinet . . . . . . . . . . . . .                     0                   * 
Robert L. Denton (23) . . . . . . . .                 4,017                   * 

All Executive Officers and Directors 
as a group**(24). . . . . . . . . . .               204,398                5.0%

*Less than 1%

**18 persons comprised of all of those named above


     All of the persons listed in the chart above have sole voting
power and sole investment power over the capital stock they
beneficially own unless otherwise indicated in the footnotes below. 

(1)  The number of shares and percentages are based upon 3,635,651
     possible votes (comprised of (i) the 2,448,267 votes which may
     be cast by all holders of outstanding Common Stock and (ii)
     the 1,187,384 votes which may be cast by Pioneer as the sole
     holder of the Series C Preferred Stock) as of February 28,
     1997.  The shares of Common Stock underlying immediately
     exercisable options, warrants or rights, immediately
     convertible securities, or options, warrants, rights or
     convertible securities that become exercisable or convertible
     within 60 days of February 28, 1997 are deemed to be
     outstanding for the purpose of calculating the number and
     percentage owned by the holders of such options, warrants,
     rights or convertible securities.

(2)  Includes 1,187,384 shares of Common Stock issuable upon
     conversion of the 15,000 shares of Series C Preferred Stock
     held by Pioneer.  The Series C Preferred Stock is entitled to
     vote together with the Common Stock on all matters coming
     before the holders of the Common Stock as if its holder had
     converted the Series C Preferred Stock into Common Stock
     immediately prior to the relevant record date.  On that basis,
     Pioneer is entitled to cast 1,187,384 votes on matters coming
     before the holders of Common Stock pursuant to its ownership
     of the Series C Preferred Stock.  Also includes options to
     purchase 8,000 shares of Common Stock held by Pioneer
     affiliated Directors.  The address of Pioneer USA and PNA is
     2265 East 220th Street, Long Beach, California 90810.  The
     address of Pioneer is 4-1 Meguro, 1 Chome, Meguro-ku, Tokyo
     153, Japan.

(3)  Represents shares of Common Stock indirectly owned by Le
     Studio through its wholly-owned subsidiary Cinepole.  In their
     most recent Schedules 13D filed with the Commission, Cinepole
     claimed shared voting power and shared investment power over
     all of its 236,006 shares of Common Stock with Le Studio and
     Le Studio's corporate parent, Canal+ S.A., and Le Studio
     claimed shared voting power and shared investment power over
     all of its 21,600 shares of Common Stock with Canal+ S.A.  The
     address of Cinepole is Surinameweg 2, NL - 2035 VA Haarlem,
     The Netherlands.  The address of Le Studio is 17, rue Dumont
     d'Urville, 75116 Paris, France.  The address of Canal+ S.A. is
     85-89 Quai Andre Citroen, 75015 Paris, France.

(4)  Includes 255,067 shares of Common Stock which may be received
     within 60 days of February 28, 1997, upon conversion of
     414,485 shares of Outstanding Preferred Stock at $16.25 per
     share.  The address of Elliott Associates, L.P. ("Elliott") is
     712 Fifth Avenue, 36th Floor, New York, New York 10019.  

(5)  Includes 232,430 shares of Common Stock which may be received
     within 60 days of February 28, 1997, upon conversion of
     377,700 shares of Outstanding Preferred Stock at $16.25 per
     share.  The address of Merrill Lynch & Co., Inc. is World
     Financial Center, North Tower 250 Vesey Street, New York, New
     York.

(6)  Represents 190,894 shares of Common Stock which are issuable
     upon exercise of presently exercisable warrants.  FMR Corp. is
     the parent of Fidelity Management & Research Company which
     manages or advises funds that hold these warrants.  The
     address of FMR Corp. and Fidelity Management & Research
     Company is 82 Devonshire Street, F7E, Boston, Massachusetts
     02109.

(7)  Includes 107,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997. 
     

(8)  Includes 4,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997. 
     

(9)  Includes 15,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997. 
     

(10) Although Mr. Noda may be deemed to own beneficially the
     securities owned by Pioneer, Mr. Noda has disclaimed
     beneficial ownership of such securities.  Includes 2,000
     shares of Common Stock which are issuable (i) upon exercise of
     presently exercisable options, warrants and rights and (ii)
     upon exercise of options, warrants and rights that become
     exercisable within 60 days of February 28, 1997.  

(11) Although Mr. Koshiba may be deemed to own beneficially the
     securities owned by Pioneer, Mr. Koshiba has disclaimed
     beneficial ownership of such securities.  Includes 2,000
     shares of Common Stock which are issuable (i) upon exercise of
     presently exercisable options, warrants and rights and (ii)
     upon exercise of options, warrants and rights that become
     exercisable within 60 days of February 28, 1997.

(12) Includes 4,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997. 
     

(13) Includes 1,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997.

(14) Although Mr. Niijima may be deemed to own beneficially the
     securities owned by Pioneer, Mr. Niijima has disclaimed
     beneficial ownership of such securities.  Includes 1,000
     shares of Common Stock which are issuable (i) upon exercise of
     presently exercisable options, warrants and rights and (ii)
     upon exercise of options, warrants and rights that become
     exercisable within 60 days of February 28, 1997.

(15) Although Mr. Orii may be deemed to own beneficially the
     securities owned by Pioneer, Mr. Orii has disclaimed
     beneficial ownership of such securities.  

(16) Includes 1,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997.

(17) Although Mr. Pierson may be deemed to own beneficially the
     securities owned by Pioneer, Mr. Pierson has disclaimed
     beneficial ownership of such securities.  Includes 3,000
     shares of Common Stock which are issuable (i) upon exercise of
     presently exercisable options, warrants and rights and (ii)
     upon exercise of options, warrants and rights that become
     exercisable within 60 days of February 28, 1997.

(18) Includes 1,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997.

(19) Includes 1,000 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997. 
     Also includes 1,846 shares of Common Stock which may be
     received upon the conversion (at $16.25 per share) of 3,000
     shares of Outstanding Preferred Stock.  

(20) Includes 14,667 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997.

(21) Includes 16,667 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997.

(22) Includes 14,067 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997.

(23) Includes 1,800 shares of Common Stock which are issuable (i)
     upon exercise of presently exercisable options, warrants and
     rights and (ii) upon exercise of options, warrants and rights
     that become exercisable within 60 days of February 28, 1997.

(24) Includes shares of Common Stock which are issuable (i) upon
     exercise of presently exercisable options, warrants and rights
     and (ii) upon exercise of options, warrants and rights that
     become exercisable within 60 days of February 28, 1997.

     The following table sets forth, as of December 31, 1996, the
beneficial ownership of shares of the Company's Series B Preferred
Stock, by each stockholder who is known by the Company to own more
than 5% of the Series B shares of the Series B Preferred Stock
based upon 3,819,802 shares of the Series B Preferred Stock Series
B as of December 31, 1996.  Although 6,000,000 shares of Series B
Preferred Stock were originally issued by the Company, LIVE
purchased approximately 2,177,500 shares through December 1996. 
The Series B Preferred Stock is convertible into Common Stock at
$16.25 per share through April of 1997, at which time the
conversion price is reduced to $15.00 per share for the next three
months, thereafter.

            BENEFICIAL OWNERSHIP OF SERIES B PREFERRED STOCK

                                           Shares of       Percentage of
Name of Beneficial                         Series B        Outstanding
    Owner                                  Preferred       Series B
                                           Stock Owned     Preferred Stock

Elliott Associates, L.P.(1)                414,485            10.9%
Merrill Lynch & Co., Inc. (2)              377,700             9.9%
Metropolitan Life Insurance Company (3)    256,500             6.8%

(1)  Elliott is a Delaware limited partnership and its principal
     business is to purchase, sell, trade and invest in securities. 
     In its most recent Schedule 13D filed with the Commission,
     Elliott claimed beneficial ownership over all 414,485 shares
     of Series B Preferred Stock owned by them and indicated it has
     sole power to vote or direct the vote of, and to dispose or
     direct the disposition of, the shares owned.  The address of
     Elliott is 712 Fifth Avenue, 36th Floor, New York, New York
     10019.

(2)  Represents shares of Series B Preferred Stock indirectly owned
     by Merrill Lynch & Co., Inc. ("ML&Co.") and certain of its
     subsidiaries and affiliates.  In its most recent Schedule 13G
     filed with the Commission, ML&Co. has provided the following
     information.  Three of the persons filing the Schedule 13G,
     ML&Co., a Delaware corporation with its principal place of
     business at World Financial Center, North Tower, 250 Vesey
     Street, New York, New York, Merrill Lynch Group, Inc., a
     Delaware corporation with its principal place of business at
     World Financial Center, north Tower, 250 Vesey Street, New
     York, New York ("ML Group"), and Princeton Services, Inc. a
     Delaware corporation with its principal place of business at
     800 Scudders Mill Road, Plainsboro, New Jersey, ("PSI"), are
     parent holding companies pursuant to the Securities Exchange
     Act of 1934 (the "1934 Act").  Pursuant to the instructions of
     Schedule 13G, the relevant subsidiaries of ML&Co. are Merrill
     Lynch, Pierce, Fenner and Smith, Incorporated, a Delaware
     corporation with its principal place of business at 250 Vesey
     Street, New York, New York ("MLPF&S"), ML Group, and PSI,
     which is the general partner of Fund Asset Management, L.P.
     (d/b/a Fund Asset Management "FAM").  The relevant subsidiary
     of ML Group is PSI.  ML&Co. may be deemed to be the beneficial
     owner of certain of the reported securities of LIVE held by or
     deemed to be beneficially owned by MLPF&S and ML Group. 
     MLPF&S, a wholly-owned direct subsidiary of ML&Co. and a
     broker-dealer, registered under Section 15 of the 1934 Act,
     may be deemed the beneficial owner of certain of the reported
     securities held in accounts under which MLPF&S has
     discretionary power.  ML Group, a wholly-owned direct
     subsidiary of ML&Co., may be deemed to be the beneficial owner
     of certain of the reported securities of the Company by virtue
     of its control of its wholly-owned subsidiary, PSI.  PSI, a
     wholly-owned direct subsidiary of ML Group, may be deemed to
     be the beneficial owner of certain of the reported securities
     of the Company by virtue of its being the general partner of
     FAM.  FAM is an investment adviser registered under Section
     203 of the Investment Advisers Act of 1940 (the "Advisers
     Act").  FAM may be deemed to be the beneficial owner of
     certain of the reported securities of the Company by virtue of
     its acting as investment adviser to one or more investment
     companies registered under Section 8 of the Investment Company
     Act of 1940 (the "Investment Company Act"), and/or one or more
     private accounts.  One registered investment company advised
     by FAM, Merrill Lynch Phoenix Fund, Inc. is the beneficial
     owner of certain of the securities of the Company reported
     herein and is a reporting person hereunder.  Pursuant to the
     1934 Act, ML&Co., ML Group, and PSI disclaim beneficial
     ownership of the securities of the Company reported in the
     Schedule 13G and indicated the filing not be construed as an
     admission that any such entity is, for the purposes of Section
     13(d) or 13(g) of the 1934 Act, the beneficial owner of any
     securities of the Company.

(3)  Represents shares of Series B Preferred Stock indirectly owned
     by Metropolitan Life Insurance Company ("Metropolitan")
     through its wholly-owned subsidiary State Street Research &
     Management Company ("State Street Research") and State Street
     Research's affiliate State Street Research Investment
     Services, Inc. ("State Street Services").  State Street
     Research and State Street Services are investment advisers
     registered under the Investment Advisers Act of 1940.  In its
     most recent Schedule 13G filed with the Commission,
     Metropolitan claimed sole voting power and sole investment
     power over all 256,500 shares of Series B Preferred Stock.  In
     their most recent Schedule 13G filed with the Commission,
     State Street Research and State Street Services claimed that
     various of their clients are the beneficial owners of all
     256,500 shares of Series B Preferred Stock held by them and
     State Street Research and State Street Services disclaimed any
     beneficial interest in those securities.  The address of
     Metropolitan is One Madison Avenue, New York, New York 10010. 
     The address of State Street Research and State Street Services
     is One Financial Center, Boston, Massachusetts 02111-2690.

     As of February 28, 1997, none of the Directors or executive
officers of the Company beneficially owned any shares of LIVE's
Series B Preferred Stock other than Mr. Yamarone, who owned 3,000
shares.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Arrangements with Members of the Compensation Committee or Their 
Affiliates 

     See "Executive Compensation - Compensation Committee Interlocks and
Insider Participation," above.  Also see "Business - Recent
Developments for the Company - New Distribution Agreements." 

Employment and Consulting Agreements

     Mr. Burlage is party to an employment agreement dated January 1, 
1997 (the "Current Agreement") with LIVE which provides that he
will serve as Chairman of the Board and Chief Executive Officer of
LIVE from January 1997 until December 2000.  Mr. Burlage's salary
per annum during 1997, 1998, 1999 and 2000 will be $610,000,
$671,000, $738,000 and $812,000, respectively.  The Current
Agreement replaces a previous employment agreement between Mr.
Burlage and LIVE which covered the period January 1994 through
December 1997 (the "Prior Agreement").  Mr. Burlage's base salary
for 1995 and 1996 under the Prior Agreement was $495,000 and
$519,750 respectively.  Under the Current Agreement Mr. Burlage
will also receive incentive compensation equal to two percent of
the Company's earnings before interest and taxes in excess of $10
million per annum, subject to certain exclusions, limited to 100%
of his base salary for the applicable year.  As part of the Current
Agreement, the Company agreed to pay for and/or provide a life
insurance policy, disability benefits, health insurance benefits,
automobile benefits, vacation benefits, business travel expenses
(including in certain instances certain spouse expenses)  and a
country club membership.  Under the Prior Agreement, the Company
granted Mr. Burlage options to acquire 120,000 shares of the
Company's Common Stock at a price of $9.375 per share (the closing
price of the Company's Common Stock on the New York Stock Exchange
on the date the Company and Mr. Burlage reached agreement on his
employment), with 30,000 of such options originally vesting
annually commencing December 31, 1994.  Pursuant to a cancellation
and reissuance plan offered to all stock option holders on March 6,
1995, the above options were canceled (the "Canceled Options") and
Mr. Burlage received 120,000 new options ("New Options") under the
following conditions; (i) the exercise price for the New Options
would equal $3.50, the closing price of the Common Stock on The
Nasdaq Stock Market's SmallCap Market on March 6, 1995, (ii) fifty
percent (50%) of the New Options would vest on March 6, 1996; the
remainder would vest on March 6, 1997, provided that no New Options
would vest earlier than the scheduled vesting date for the
corresponding Canceled Options, and (iv) all New Options would
expire on the expiration date of the corresponding Canceled
Options.  In connection with the Current Agreement, on March 12,
1997 the Company granted Mr. Burlage options to acquire 183,276
additional shares of the Company's Common Stock at an exercise
price of $3.75 per share (the closing price of the Company's Common
Stock on The Nasdaq Stock Market's National Market on March 12,
1997), which vest in four equal annual installments on December 31
of each year of the Current Agreement.  If Mr. Burlage's employment
is terminated by LIVE for other than "good cause," or in certain
instances of a change in ownership control (as defined in the
contract), he will receive his salary, incentive compensation, life
insurance, health insurance and automobile benefits for the
remainder of the term of his employment agreement.  All payments
pursuant to the provisions of the immediately preceding sentence
would be reduced, dollar for dollar, by the amount received by Mr.
Burlage from employment following termination of his agreement. 


     Mr. Cushey entered into an employment agreement with the
Company effective August 15, 1996 that contains a term through
December 31, 1999.  Mr. Cushey is entitled to receive annual base
salaries of $210,000, $220,000, $230,000 and $240,000 during 1996,
1997, 1998 and 1999 respectively.  The agreement provides that Mr.
Cushey will be eligible for a year-end bonus, at the discretion of
LIVE's management.  If Mr. Cushey's employment is terminated other
than for cause, or in certain instances of a change in ownership
control (as defined in the contract), he will be entitled to be
paid the remaining balance of his salary in accordance with its
terms until he shall become employed, in which case in certain
circumstances he shall be paid the difference (if less) between his
new salary and his compensation hereunder.  Mr. Cushey received a
total of 35,000 stock options under provisions of his current and
former employment contracts exercisable at prices ranging from
$2.75 to $3.75 per share over various time periods to September
1999.

    Mr. Mangel entered into a three year employment agreement with
LFM effective July 1, 1994.  Mr. Mangel is entitled to receive an
annual base salary of $260,000 during the first year of the
agreement with annual increase of no less than 5%.  His current
annual salary is $286,650.  The agreement provides that Mr. Mangel
will be eligible for a year-end bonus, at the discretion of LIVE's
management and that premiums of a life insurance policy will be
paid by LFM on behalf of Mr. Mangel.  If Mr. Mangel's employment is
terminated other than for cause, he will be entitled to be paid the
remaining balance of his salary in accordance with its terms until
he shall become employed, in which case in certain circumstances he
shall be paid the difference (if less) between his new salary and
his compensation hereunder.  

    Ms. Dubinet entered into a three-year employment agreement
with LFM commencing September 12, 1996.  Ms. Dubinet is entitled to
an annual salary of $350,000 for the first year, $375,000 for the
second year, and $400,000 for the third year.  Ms. Dubinet has
received options to purchase 50,000 shares of Common Stock at $3.75
per share vesting in three equal annual installments and, if
employed by the Company on the first and second anniversaries of
the employment agreement, will receive an additional 15,000 and
10,000 shares, respectively, at the market prices on the first and
second anniversaries of the agreement, also vesting over three
years from the date of grant.  Ms. Dubinet will participate in the
Company's annual corporate bonus pool.  Ms. Dubinet is also
entitled to receive certain performance bonuses payable with
respect to the Company's distribution activities in domestic and
foreign territories with respect to certain films that she has
brought to or acquires on behalf of the Company in the future.  Ms.
Dubinet's percentage of revenues varies from 2% of revenues in
excess of a varying threshold amount for certain acquisitions to up
to 10% of revenues with respect to other film acquisitions.  In
addition, distribution fees with respect to certain preexisting
films to which Ms. Dubinet controls distribution rights are to be
divided 25% to Ms. Dubinet and 75% to the Company.  Finally, the
Company advanced to an affiliate of Ms. Dubinet approximately
$400,000 reflecting commitments made by her in connection with
existing films to which the Company is acquiring distribution
rights.  The advance is to be repaid, plus interest, out of fees
earned from future revenues from these films.  Ms. Dubinet is to
guaranty the repayment of this advance.  Ms. Dubinet is also
entitled to executive benefits comparable to those provided to
other senior executives, including life and health insurance, three
weeks vacation and reimbursement of travel and business expenses. 
Ms. Dubinet has the right to terminate her employment agreement
with the Company in the event that Mr. Burlage ceases to be the
Chief Executive Officer of the Company prior to September 12, 1998. 
Ms. Dubinet and the Company are completing a formal "long form"
employment agreement reflecting the foregoing terms.  

    Mr. Slutzky entered into an employment agreement with LFM
effective on August 15, 1996 and expiring on December 31, 1999. 
Mr. Slutzky is entitled to annual base salaries of $300,000,
$320,000, $340,000 and $360,000 in 1996, 1997, 1998 and 1999,
respectively.  The agreement provides that Mr. Slutzky will be
eligible for a year-end bonus and a theatrical performance bonus,
at the discretion of LIVE's management, and Mr. Slutzky also
received a total of 44,000 stock options at exercise prices ranging
from $3.25 to $3.75 per share under his current and former
employment agreements.  If Mr. Slutzky's employment is terminated
other than for cause, he will be entitled to be paid the remaining
balance of his salary in accordance with its terms until he shall
become employed, in which case in certain circumstances he shall be
paid the difference (if less) between his new salary and his
compensation hereunder.  

    Mr. Almond entered into an employment agreement effective
August 15, 1995 and expiring on December 31, 1999.  Mr. Almond is
entitled to receive annual base salaries of $215,250, $280,000,
$300,000 and $325,000 during 1996, 1997, 1998 and 1999,
respectively.  The agreement provides that Mr. Almond will be
eligible for a year-end bonus, at the discretion of LIVE's
management.  Mr. Almond received a total of 40,000 stock options at
exercise prices ranging from $3.25 to $3.75 per share under his
current and former employment agreements.  If Mr. Almond's
employment is terminated other than for cause, he will be entitled
to be paid the remaining balance of his salary in accordance with
its terms until he shall become employed, in which case in certain
circumstances he shall be paid the difference (if less) between his
new salary and his compensation hereunder.  

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

     (a)(1)    The following consolidated financial statements of
LIVE and its subsidiaries are included in Item 8 and filed
herewith:

          Consolidated Balance Sheets as of December 31, 1996 and
          1995

          Consolidated Statements of Operations for the Years Ended
          December 31, 1996, 1995 and 1994

          Consolidated Statements of Stockholders' Equity for the
          Years Ended December 31, 1996, 1995 and 1994
     
          Consolidated Statements of Cash Flows for the Years Ended
          December 31, 1996, 1995 and 1994

          Notes to Consolidated Financial Statements

     (a)(2)    The following consolidated financial statement
schedule is included in Item 14(d):

          Schedule II    --   Valuation and Qualifying Accounts

          All other schedules for which provision is made in the
applicable accounting regulation of the Commission are either not
required under the related instructions or are inapplicable, and
therefore have been omitted.

     (a)(3)    The exhibits listed on the Exhibit Index are filed
as part of this report.

     (b)  No reports on Form 8-K were filed by the Company for the
quarter ended December 31, 1996. 
<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.

                         LIVE ENTERTAINMENT INC.

                         By   /s/  ROGER A. BURLAGE       
                                      Roger A. Burlage
                                   Chief Executive Officer

Dated: April 11, 1997


     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.

    Signature                Title                              Date




/s/ ROGER A. BURLAGE         Chairman of the Board and          April 11, 1997
     Roger A. Burlage        Chief Executive Officer  
                             (principal executive officer);
                             Director

/s/ RONALD B. CUSHEY         Executive Vice President and       April 11, 1997
     Ronald B. Cushey        Chief Financial Officer
                             (principal financial officer);
                             Director


/s/ ROBERT L. DENTON         Senior Vice President and          April 11, 1997
     Robert L. Denton        Chief Accounting Officer
                             (principal accounting officer)


    JAY BURNHAM*             Director                           April 11, 1997
     Jay Burnham


    MAKOTO KOSHIBA*          Director                           April 11, 1997
     Makoto Koshiba



    JONATHAN D. LLOYD*       Director                           April 11, 1997
     Jonathan D. Lloyd

<PAGE>
   
    Signature                Title                              Date

    CHARLES K. MAC DONALD*   Director                           April 11, 1997
     Charles K. MacDonald



    AKIRA NIIJIMA*           Director                           April 11, 1997
     Akira Niijima



    RYUICHI NODA*            Director                           April 11, 1997
     Ryuichi Noda



    MELVIN PEARL*            Director                           April 11, 1997
     Melvin Pearl



    EIJI ORII*               Director                           April 11, 1997
     Eiji Orii



    MICHAEL SOLOMON*         Director                           April 11, 1997
     Michael Solomon



    GREGORY R. PIERSON*      Director                           April 11, 1997
     Gregory R. Pierson



    CHARLES YAMARONE*        Director                           April 11, 1997
     Charles Yamarone

   By signing his name hereto, Roger A. Burlage signs this document
as Chief Executive Officer of the Registrant and on behalf of the
persons indicated above pursuant to powers of attorney duly
executed by such persons and filed herewith.

By: /s/ ROGER A. BURLAGE, ATTORNEY-IN-FACT
        Roger A. Burlage, Attorney-In-Fact







                      REPORT OF INDEPENDENT AUDITORS


Board of Directors
LIVE Entertainment Inc.


    We have audited the accompanying consolidated balance sheets of LIVE 
Entertainment Inc. and subsidiaries as of December 31, 1996 and 1995, and 
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1996.
Our audits also included the financial statement schedule listed in the Index 
at Item 14(a).  These financial statements and schedule are the responsibility
of the Company's management.  Our responsibility is to express an opinion on 
these financial statements and 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 financial statements referred to above, present 
fairly, in all material respects, the consolidated financial position of 
LIVE Entertainment Inc. and subsidiaries at December 31, 1996 and 1995, and
the consolidated results of their operations and their cash flows for each of 
the three years in the period ended December 31, 1996, in conformity with 
generally accepted accounting principles.  Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic 
financial statements taken as a whole, presents fairly, in all material 
respects, the information set forth therein.


                             ERNST & YOUNG LLP


Los Angeles, California
April 9, 1997
<PAGE>
                 
                 LIVE ENTERTAINMENT INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                          (Amounts in Thousands)
                                                                December 31,    
                                                               1996      1995 
                               ASSETS 
ASSETS:
   Cash and cash equivalents, including restricted cash
     of $668 and $1,352. . . . . . . . . . . . . . . .        $41,992  $ 49,487
   Accounts receivable, less allowances of $20,879 
     in 1996 . . . . . . . . . . . . . . . . . . . . .          7,906        --
   Inventories . . . . . . . . . . . . . . . . . . . .          6,206     4,813
   Property and equipment, net . . . . . . . . . . . .          1,058     1,145
   Film costs, net of accumulated amortization of 
     $610,067 and $526,590 . . . . . . . . . . . . . .         62,633    66,700
   Other assets. . . . . . . . . . . . . . . . . . . .          1,940     1,353
   Goodwill, net of accumulated amortization of 
     $43,967 and $40,042 . . . . . . . . . . . . . . .         22,022    25,947
                                                             $143,757  $149,445
                   
                   LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
   Accounts payable. . . . . . . . . . . . . . . . . .         $5,177    $6,675
   Accrual for returns and advertising net of 
     accounts receivable of $15,447 in 1995  . . . . .             --     3,430
   Accrued expenses. . . . . . . . . . . . . . . . . .          3,918     7,737
   Deferred revenue. . . . . . . . . . . . . . . . . .          8,492     4,714
   Notes payable . . . . . . . . . . . . . . . . . . .         13,571     8,333
   Increasing Rate Senior Subordinated Notes 
     due 1999, including capitalized interest of
     $9,176 and $13,184. . . . . . . . . . . . . . . .         49,176    53,184
   Film obligations. . . . . . . . . . . . . . . . . .         14,577    18,559
   Dividends payable . . . . . . . . . . . . . . . . .          4,033     2,309
   Income taxes payable and deferred income taxes. . .         16,346     6,484
   Total liabilities . . . . . . . . . . . . . . . . .        115,290   111,425

STOCKHOLDERS' EQUITY:
   Series B Cumulative Convertible Preferred Stock--
     authorized 9,000,000 shares; $1.00 par value; 
     $38,198,000 liquidation preference (1996); 
     $41,970,000 liquidation preference (1995); 
     3,819,000 (1996) and 4,197,000 (1995) 
     shares outstanding  . . . . . . . . . . . . . . .          3,819     4,197
   Series C Convertible Preferred Stock--15,000 shares 
     authorized and outstanding; $1.00 par value; 
     $15,000,000 liquidation preference. . . . . . . .             15        15
   Common Stock -- authorized 24,000,000 shares 
     (1996 and 1995); $0.01 par value; 2,448,267 
     (1996) and 2,418,424 (1995) shares 
     outstanding . . . . . . . . . . . . . . . . . . .             24        24
   Additional paid-in capital. . . . . . . . . . . . .        123,930   129,668
   Retained deficit. . . . . . . . . . . . . . . . . .        (99,321)  (95,884)
                                                               28,467    38,020
                                                             $143,757  $149,445

              See notes to consolidated financial statements.
<PAGE>
                 
               LIVE ENTERTAINMENT INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
              (Amounts in Thousands, Except Per Share Data)
                                                         Year Ended    
                                                         December 31,    
                                                  1996       1995       1994 

Net sales. . . . . . . . . . . . . . . . .   $ 151,425   $ 140,112   $ 117,205
Cost of goods sold . . . . . . . . . . . .     127,560     113,025     101,781
       GROSS PROFIT. . . . . . . . . . . .      23,865      27,087      15,424
Operating expenses:
   Selling, general and administrative 
     expenses. . . . . . . . . . . . . . .      15,907      15,249      17,673
   Amortization of goodwill. . . . . . . .       3,924       3,925       3,925
                                                19,831      19,174      21,598
                                                 4,034       7,913      (6,174)
Disposal of VCL/Carolco Communications GmbH (VCL):
   Net Sales . . . . . . . . . . . . . . .          --      32,257      22,712
   Costs and Expenses. . . . . . . . . . .          --      32,257      22,712
                                                    --          --          --
   Gain on disposal of VCL . . . . . . . .          --       2,913          --
                                                    --       2,913          --
       OPERATING PROFIT (LOSS) . . . . . .       4,034      10,826      (6,174)
   Interest and other income . . . . . . .       2,058       2,424       2,692
   Interest expense. . . . . . . . . . . .      (1,529)     (1,859)     (5,992)
       INCOME (LOSS) FROM CONTINUING 
         OPERATIONS BEFORE INCOME TAXES. .       4,563      11,391      (9,474)
   Income tax expense. . . . . . . . . . .       8,000         600         200
       (LOSS) INCOME FROM CONTINUING 
         OPERATIONS. . . . . . . . . . . .      (3,437)     10,791      (9,674)
Discontinued Operations:
   (Loss) from discontinued operations 
     net of income taxes . . . . . . . . .          --          --        (100)
       (LOSS) FROM DISCONTINUED OPERATIONS          --          --        (100)
       NET (LOSS) INCOME . . . . . . . . .    $ (3,437)   $ 10,791    $ (9,774)

Net (loss) income per common share:
Primary:
   Continuing operations . . . . . . . . .    $  (3.03)   $   1.34    $  (8.05)
   Discontinued operations . . . . . . . .          --          --       (0.04)
   Net (loss) income . . . . . . . . . . .    $  (3.03)   $   1.34    $  (8.09)
   
Weighted average number of shares 
  outstanding. . . . . . . . . . . . . . .   2,441,055   2,436,309   2,418,003
Net (loss) income attributable to 
  common stock . . . . . . . . . . . . . .   $  (7,389)   $  3,255   $ (19,565)

Fully Diluted:
   Continuing operations . . . . . . . . .   $   (3.03)   $    .53   $   (8.05)
   Discontinued operations . . . . . . . .          --          --       (0.04)
   Net (loss) income . . . . . . . . . . .   $   (3.03)   $    .53   $   (8.09)

Weighted average number of shares 
  outstanding. . . . . . . . . . . . . . .   2,441,055  20,541,896   2,418,003
Net (loss) income attributable to 
  common stock . . . . . . . . . . . . . .   $  (7,389)   $ 10,791   $ (19,565)

              See notes to consolidated financial statements.
  <PAGE>
                   
<TABLE>                  LIVE ENTERTAINMENT INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (Dollar Amounts in Thousands)
<CAPTION>
                                                            Year Ended December 31,                              
                                              1996                   1995                    1994         
                                       Shares      Amounts    Shares       Amounts    Shares      Amounts

<S>                                    <C>         <C>        <C>          <C>        <C>         <C>    
Series B Cumulative Convertible
Preferred Stock
 Beginning balance . . . . . . . . .   4,197,000   $ 4,197     5,600,000   $ 5,600    1,000,000   $ 1,000
 Repurchase of Series B Cumulative 
 Convertible Preferred Stock . . . .    (378,000)     (378)   (1,400,000)   (1,403)    (400,000)     (400)
 Other . . . . . . . . . . . . . . .                              (3,000)
 Transferred from current                                      
   liabilities . . . . . . . . . . .                                                  5,000,000     5,000
 Ending balance. . . . . . . . . . .   3,819,000     3,819     4,197,000     4,197    5,600,000     5,600

Series C Convertible Preferred Stock
 Beginning balance . . . . . . . . .      15,000        15        15,000        15       15,000        15
 Ending balance. . . . . . . . . . .      15,000        15        15,000        15       15,000        15

Common Stock
 Beginning balance . . . . . . . . .   2,418,424        24     2,418,720        24    2,418,003        24
 Common Stock issued (repurchased) .      29,843                    (296)                   717
 Ending balance. . . . . . . . . . .   2,448,267        24     2,418,424        24    2,418,720        24
</TABLE>

<TABLE>                                 
<CAPTION>                                  
                                                                   Year Ended December 31,                             
                                                   1996                    1995                   1994   
<S>                                                <C>                     <C>                    <C>
Additional Paid-in Capital
 Beginning balance . . . . . . . . . . . . . . .   $ 129,668               $ 136,753              $ 106,604
 Series B Cumulative Convertible 
 Preferred Stock dividend accrual. . . . . . . .      (3,081)                 (2,198)                (3,000)
 Series C Convertible Preferred 
   Stock dividend accrual  . . . . . . . . . . .        (871)                   (829)                  (791)
 Common Stock issued (repurchased) . . . . . . .         168                      (1)                               
 Series B Cumulative Convertible 
   Preferred Stock repurchase. . . . . . . . . .      (1,954)                 (4,057)                (1,060)
 Series B Cumulative Convertible
 Preferred Stock transferred from 
   current liabilities . . . . . . . . . . . . .          --                      --                 35,000
 Ending balance  . . . . . . . . . . . . . . . .     123,930                 129,668                136,753

Retained Earnings (Deficit)
 Beginning balance . . . . . . . . . . . . . . .     (95,884)               (106,675)               (96,901)
 Net (loss) income . . . . . . . . . . . . . . .      (3,437)                 10,791                 (9,774)
 Ending balance. . . . . . . . . . . . . . . . .     (99,321)                (95,884)              (106,675)

Total Stockholders' Equity . . . . . . . . . . .    $ 28,467                $ 38,020               $ 35,717
</TABLE>
               See notes to consolidated financial statements.
<PAGE>
                   
                  LIVE ENTERTAINMENT INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Amounts in Thousands)
                                                            Year Ended
                                                            December 31,    
                                                    1996      1995       1994
OPERATING ACTIVITIES:
   (Loss) Income from continuing operations. .   $ (3,437)  $ 10,791  $ (9,674)
   Adjustments to reconcile net (loss) income
    to net cash provided by (used for) 
    continuing operating activities:
      Depreciation and amortization of 
        property and equipment . . . . . . . .        597        715       745
      Amortization of goodwill . . . . . . . .      3,925      3,925     3,925
      Amortization of and adjustments to 
        film costs . . . . . . . . . . . . . .     83,477     60,330    49,056
      Income taxes payable and deferred 
        income taxes . . . . . . . . . . . . .      9,862       (152)      624
   (Increase) decrease in operating assets, 
     net of acquisitions:
      Accounts receivable. . . . . . . . . . .    (11,336)     1,950       482
      Inventories. . . . . . . . . . . . . . .     (1,393)     3,029     2,282
      Receivable related to assets held 
        for sale . . . . . . . . . . . . . . .         --     17,916    68,084
      Receivable from stockholder. . . . . . .         --         --     8,047
      Film cost additions. . . . . . . . . . .    (79,410)   (59,921)  (58,096)
      Other assets . . . . . . . . . . . . . .       (587)     1,090       420
   Increase (decrease) in operating 
     liabilities, net of acquisitions: 
      Accounts payable, accrued expenses, 
        and deferred revenue . . . . . . . . .     (1,539)     4,338    (1,707)
      Accrual for returns and advertising. . .         --      3,430        --
      Liabilities related to assets held 
        for sale . . . . . . . . . . . . . . .         --    (13,542)  (33,059)
      Payments on film costs obligations . . .     (3,982)    (1,217)    3,926
        Cash (used for) provided by continuing 
          operating activities . . . . . . . .     (3,823)    32,682    35,055
        Cash (used for) provided by 
          discontinued operations. . . . . . .         --         --      (100)
        Cash (used for) provided by operating 
          activities . . . . . . . . . . . . .     (3,823)    32,682    34,955
INVESTING ACTIVITIES:
   Acquisition of property and equipment . . .       (510)      (460)     (459)
        Cash used for investing activities . .       (510)      (460)     (459)
FINANCING ACTIVITIES:
   Issuance of long-term obligations . . . . .     10,000     10,000     2,500
   Payments on long-term obligations . . . . .     (8,770)    (8,689)  (50,631)
   Repurchase of Series B Cumulative 
     Convertible Preferred Stock . . . . . . .     (2,332)    (5,460)   (1,460)
   Dividends paid on Series B Preferred 
     Stock . . . . . . . . . . . . . . . . . .     (2,228)    (2,850)   (2,999)
   Issuance of Common Stock. . . . . . . . . .        168         --        --
        Cash used for financing activities . .     (3,162)    (6,999)  (52,590)
        (Decrease) Increase in cash and 
          cash equivalents . . . . . . . . . .     (7,495)    25,223   (18,094)
        Cash and cash equivalents at 
          beginning of period. . . . . . . . .     49,487     24,264    42,358
        Cash and cash equivalents at end 
          of period. . . . . . . . . . . . . .   $ 41,992   $ 49,487  $ 24,264
          
               See notes to consolidated financial statements.
<PAGE>
                LIVE ENTERTAINMENT INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996

Note 1 - Summary of Significant Accounting Policies

     Background and Operations:  LIVE Entertainment Inc. ("LIVE" or
the "Company") was formed in 1988 and its largest ongoing
businesses are LIVE Film & Mediaworks Inc. ("LFM") (formerly LIVE
Home Video Inc.) and LIVE International ("LI"), which primarily
acquires rights to produce and distribute theatrical motion
pictures, children's films and special interest programs (including
CD-ROM) which they market and distribute in all media to
wholesalers, retailers and consumers in the United States and
Canada (LFM) and internationally (LI).  As part of its
international activities, the Company also owned an 81% interest in
VCL/Carolco Communications GmbH ("VCL"), a home video distribution
and marketing company headquartered in Munich, Germany.  VCL's
year-end is November 30.  In November 1995, LIVE disposed of its
interest in VCL.  The Company's continuing operations are
principally in a single business segment, the production,
distribution and retail sale of a broad variety of film related
entertainment software products.

     Principles of Consolidation:  The financial statements include
the accounts of the Company and its subsidiaries  LFM, LI and VCL. 
The financial statements reflect the Company's interests in, and
account for, VCL as a disposal of a portion of a line of business. 
All significant intercompany balances and transactions have been
eliminated.

     Cash Equivalents:  Cash equivalents are all highly liquid
investments maturing in three months or less when purchased. 

     Restricted Cash:  Restricted cash is cash required to be on
reserve for film production contingencies.  Such restricted cash is
expected to be available to the Company within 12 months of the
balance sheet date.

     Accounts Receivable Allowances:  Accounts receivable are net
of allowances for doubtful accounts, sales returns and advertising
credits (1996).  The accrual for returns and advertising costs are
net of accounts receivable (1995).

     Inventory Valuation:  LFM's inventory of duplicated
videocassettes and boxes is stated at the lower of cost or
market.  All other inventories, which consist of videocassettes and
accessories, are stated at the lower of cost or market determined
by using an average cost which approximates the first-in, first-out
(FIFO) method. 

     Depreciation and Amortization:  Property and equipment are
stated at cost and are depreciated over their estimated service
lives using accelerated and straight-line methods.  Leasehold
improvements are amortized over the lesser of their estimated
useful lives or the terms of the related leases.

     Film Costs:  Acquisition, production, print and advertising
costs (which benefit future periods) are capitalized as film costs. 
Film costs are stated at the lower of unamortized cost or estimated
net realizable value.  In accordance with Financial Accounting
Standards Board Statement No. 53, the individual film forecast
method is used to amortize film costs.  Film costs are amortized in
the proportion that gross revenues realized bear to management's
estimate of the total gross revenues expected to be received. 
Estimated liabilities for residuals and participations are accrued
and expensed in the same manner as film costs are amortized.  Where
film rights are acquired from producers for a guaranteed minimum
payment and the producer retains a participation in the film
profits, the film profits are allocated to the Company until the
guaranteed minimum payment is recovered, after which the producer's
share is accrued.

     Revenue estimates on a film by film basis are reviewed
periodically by management and are revised, if warranted, based
upon management's appraisal of current market conditions.  Based on
this review, if estimated future gross revenues from a film are not
sufficient to recover the unamortized film costs, other direct
distribution expenses, and participations, the unamortized film
cost shall be written down to net realizable value.  In unusual
cases, such as a change in public acceptance of certain types of
films or actual costs substantially in excess of budgeted costs, a
write-down to net realizable value may be required before the film
is released.

     Goodwill:  Goodwill represents both the excess of
consideration paid for companies acquired in purchase transactions
over the estimated fair value of the net assets of such companies
and the application of pushdown accounting associated with the
purchase of LFM by Carolco Pictures Inc. ("Carolco") in 1986. 
Goodwill is being amortized principally on a straight-line basis
over 20 years.  It is the Company's policy to evaluate goodwill and
recognize impairment if it is probable that the recorded amounts
are not recoverable from future cash flows. 

     Income Taxes:  The Company records its income tax provision in
accordance with the Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("SFAS No. 109").  Deferred
income taxes are provided on transactions which are reported in the
financial statements in different periods than they are for income
tax purposes.  Current and deferred taxes are provided based on
filing a consolidated tax return for federal income tax purposes
and combined state tax returns where permitted by state taxing
authorities.

     Revenue Recognition:  Minimum guaranteed amounts from
theatrical exhibition and revenues from home video, free television
and pay television license agreements are recognized in accordance
with Financial Accounting Standards Board No. 53, when the license
period begins for each motion picture, the license fee and cost of
each picture are known, such motion pictures have been accepted and
are available pursuant to the terms of the noncancelable license
agreements and the collectability of the full license fee is
reasonably assured.  Revenues from theatrical exhibition in excess
of minimum guaranteed amounts are recognized during the period of
exhibition.  Cash collected in advance of the time of availability
is recorded as advance collections on 
contracts.

     Once completed, a typical theatrical film will generally be
made available for license as follows:

                                     Months After       Approximate
      Marketplace                    Initial Release    Release Period

     Domestic theatrical             ----               1-6 months
     Domestic home video             4-6  months        ----
     Domestic pay-per-view           4-6  months        3 months
     Domestic pay television         6-10 months        12-21 months
     Domestic network/basic cable    30-36 months       18-36 months
     Domestic syndication            30-36 months       3-15 years
     Foreign home video              6-12 months        ----
     Foreign television              18-24 months       18-30 months

     Video Cassette and Disc Sales Revenue and Returns Recognition: 
Revenue from sales is generally recognized upon delivery to the
customer.  However, in accordance with industry practice, certain
sales are made with the right to return unsold items.  An allowance
is provided for the gross profit impact of future sales returns,
which reduces sales and cost of goods sold accordingly.

     Net (Loss) Income Per Common Share: Net (Loss) Income per common
share is based on the weighted average number of common and common
equivalent shares outstanding during the periods.  Common
equivalent shares, consisting of outstanding stock options and
warrants, and convertible preferred stock are not included in the
1994 and 1996 calculations as they are antidilutive.  Primary per
share information has been determined on the basis of 2,441,055,
2,436,309, and 2,418,003 weighted average shares outstanding for
the years ended December 31, 1996, 1995 and 1994, respectively. 
The net (loss) income per common share for the year ended December
31, 1995 and 1994 gives effect to the accretion of the redemption
value of the Series B Cumulative Convertible Preferred Stock (the
"Series B Preferred Stock") of $4,509,000 and $6,000,000
respectively.  The net (loss) income per common share for the years
ended December 31, 1996, 1995 and 1994 gives effect to total
dividends on both the Series B Preferred Stock and the Series C
Convertible Preferred Stock (the "Series C Preferred Stock") of
$3,952,000, $3,027,000, and 3,791,000 respectively.  Fully diluted
per share information for the year ended December 31, 1995 has been
determined on the basis of 20,541,896 weighted average number of
shares outstanding, assuming conversion of the Series B Preferred
Stock and the Series C Preferred Stock.

     Concentration of Credit Risk:  The Company sells film
properties and videocassettes to wholesalers, retailers and
consumers worldwide.  Sales by LFM are made to customers
nationwide.  Sales by LI are made to customers in various
territories worldwide.  Credit is extended to wholesalers and
retailers based on an evaluation of the customer's financial
condition, and generally collateral is not required.  Credit losses
are provided for in the financial statements and consistently have
been within management's expectations.  Credit risk relating to the
sale and distribution of videocassettes by Warner-Elektra-Atlantic
Corporation ("WEA") to LFM's customers has been assumed by WEA
under the terms of a three-year distribution agreement (see Note 7).

     The Company places its temporary cash investments with high
credit quality financial institutions and limits the amount of
credit exposure to any one financial institution.  Generally, the
investments made mature within 30 to 90 days and therefore are
subject to little risk.  The Company has not incurred any losses
related to these investments.

     Fair Values of Financial Instruments:  At December 31, 1996,
the carrying value of the Company's financial instruments, which
consist primarily of debt, approximates the fair value thereof. 
Fair value of publicly held debt has been determined based on
quoted market prices.

     Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying
notes.  Actual results could differ from those estimates.

     Stock Based Compensation: The Company accounts for its stock
compensation arrangements under the provision of APB 25,
"Accounting for Stock Issued to Employees," and intends to continue
this method of accounting.

     Re-classification:  Certain re-classifications were made to
the 1994 and 1995 financial statements to conform to the 1996
presentation.

Note 2 - Series C Preferred Stock

     On March 23, 1993, Pioneer Entertainment (USA) L.P., formerly
Pioneer LDCA, Inc., ("Pioneer") received 15,000 shares of the
Company's Series C Preferred Stock, par value $1.00 per share and
in 1995 transferred these shares to its parent company, Pioneer
Electronic Corporation ("PEC").

     The Series C Preferred Stock bears a cash dividend rate of 5%
($50 per share) per annum, payable semi-annually on June 30 and
December 31 of each year.  Although the June 30 and December 31
dividends were accrued by the Company during 1993, 1994, 1995, and
1996, dividends totaling approximately $3,078,000 ($205.20 per
share) (including dividends on the unpaid dividends) were not paid
due to restrictions imposed on the Company by the terms of the
Series B Preferred Stock, which prohibit the payment of dividends
on the Series C Preferred Stock unless the aggregate amount of such
dividends, together with all cash dividends paid on the Series B
Preferred Stock, does not exceed the net income of the Company
(adding back specified net worth exclusions) since the March 23,
1993 date of issuance of the Series C Preferred Stock and the
Series B Preferred Stock.  The Company has realized cumulative
consolidated net losses since the Series C Preferred Stock and the
Series B Preferred Stock were issued.  Thus, pursuant to the terms
of the Series B Preferred Stock, the Company is prohibited from
paying the June 30 and December 31, 1993, 1994, 1995, and 1996 cash
dividends on the Series C Preferred Stock.

     The Series C Preferred Stock ranks junior to the Series B
Preferred Stock and senior to all other classes of stock of the
Company.  The Series C Preferred Stock is convertible into 1,187,384
shares of common equity of the Company (either Common Stock or 
Series A Common Stock) at December 31, 1996.  The number of shares 
into which the Series C Preferred Stock is convertible was determined 
by dividing the $15,000,000 liquidation preference plus accrued 
dividends of approximately $3,078,000 of the Series C Preferred 
Stock by $15.225, which was 140% of the average closing price 
of the Company's Common Stock for the ten trading days ending
March 18, 1993, the date that was three business days prior to the
completion of the Company s financial restructuring on March 23,
1993 ("Restructuring").  Holders of the Series C Preferred Stock
are entitled to vote with the holders of Common Stock generally
with each share entitled to as many votes as the number of shares
of Common Stock into which it may be converted.  The Series C
Preferred Stock, in combination with the Company's Common Stock
owned by PEC, represents approximately 50% of the voting equity of
the Company (see Note 12).  The Series C Preferred Stock may only
be redeemed in certain limited circumstances in the event of
increases in the trading price of the Company's Common Stock or in
the event of a merger of the Company with another entity.

Note 3 - Discontinued Operations

     On August 31, 1994, LIVE sold its entire interest in its
Specialty Retail Division, which consisted of its formerly wholly
owned subsidiary, Strawberries Inc. ("Strawberries") and
Strawberries  wholly owned subsidiary, Waxie Maxie Music Co.
("Waxie Maxie") to a group including Castle Harlan, Inc., the
President of the Specialty Retail Division, and other senior
managers of the Specialty Retail Division.  The purchaser group
also included Jefferson Capital Group, Ltd. ("Jefferson Capital"). 
The total purchase price paid to LIVE for the Specialty Retail
Division was $35,000,000 in cash, resulting in a loss on disposal
of $23,773,000, which was accrued in 1993.  On February 22, 1997,
Strawberries filed for protection under Chapter 11 of the United
States Bankruptcy Code.

     The Specialty Retail Division's revenues for the seven months
ended August 31, 1994 were $57,846,000.   Losses from operations
for the same period were $3,339,000 which was accrued in 1993, net
of provision for income taxes of $100,000.

     In March 1994, primarily as a result of the Company s desire
to focus its efforts on its core entertainment business, the Board
of Directors of the Company decided to dispose of the Company s
interest in VCL.  In February 1995, the Company and certain of its
affiliates, on the one hand, and Datty Ruth, the owner of 19% of
VCL, and Apricot Computer GmbH ("Apricot"), on the other, entered
into a preliminary agreement whereby the Company's 81% interest in
VCL, as well as all receivables owed by VCL to the Company or its
affiliates, would be transferred to Ruth and Apricot.  The total
consideration to be received by the Company and its affiliates in
connection with such transactions was approximately $7,444,000, of
which approximately $3,100,000 was received in February 1995.  The
remaining $4,344,000 was received in November 1995, and a gain of
approximately $2,913,000 was reflected in the quarter ended
September 30, 1995, resulting from the completion of this
transaction.

Note 4 - Foreign Operations

     For the year ended December 31, 1994, net revenues, operating
profits and identifiable assets relating to foreign operations were
$26,629,000, $2,945,000 and $33,262,000, respectively.  For the
year ended December 31, 1995, net revenues and operating profits
relating to foreign operations were $32,257,000 and $8,775,000. 

Note 5 - Film Costs
     
The components of film costs are as follows:
                                                            December 31, 
                                                         1996        1995 
                                                          (In Thousands)

Released . . . . . . . . . . . . . . . . . . . .       $42,872     $20,476
In Production. . . . . . . . . . . . . . . . . .         7,637      21,884
Development. . . . . . . . . . . . . . . . . . .         2,386       5,096
Video Cassette and Disc. . . . . . . . . . . . .         9,738      19,244
  TOTAL FILM COSTS . . . . . . . . . . . . . . .       $62,633     $66,700

The Company estimates that 90.4% of its film costs will be
amortized during the three years ending December 31, 1999.

Note 6 - Property and Equipment

The components of property and equipment are as follows:
                                                         
                                                            December 31, 
                                                         1996        1995 
                                                          (In Thousands)

Building and improvements. . . . . . . . . . . .       $   493     $   456
Equipment and furniture. . . . . . . . . . . . .         7,051       6,578
                                                         7,544       7,034
Less accumulated depreciation and amortization .        (6,486)     (5,889)
                                                      $  1,058     $ 1,145

Note 7 - Debt and Other Financing


Debt
 and other financing consist of the following:
                                                            December 31,  
                                                         1996        1995 
                                                          (In Thousands)

Distribution agreements. . . . . . . . . . . . .       $13,571     $ 8,333
Increasing Rate Senior Subordinated Notes 
  due 1999 (see Note 10), including
  capitalized interest of $9,176 (1996) 
  and $13,184 (1995) . . . . . . . . . . . . . .        49,176      53,184
                                                       $62,747     $61,517

     LIVE and its affiliates are a party to a three-year $30,000,000
revolving credit facility with Foothill Capital Corporation (the
"Foothill Credit Facility") expiring November 14, 1997. In March
1997, an amendment was entered into that extended the expiration
date of the Foothill Credit Facility, under the existing terms, to
March 1, 1998. Borrowings available under the Foothill Credit
Facility are limited to $27,500,000 until additional participant
lenders are added to the Facility, at which time the borrowings
available will be increased to a maximum $30,000,000.  Borrowings
under the Foothill Credit Facility are determined under a borrowing
base calculation, which includes certain allowable accounts
receivable, film rights and inventory balances, and are secured by
substantially all of the assets of LIVE and its subsidiaries.  
Outstanding borrowings under the Foothill Credit Facility bear
interest at the rate of 2% per annum above the highest of the Bank
of America, Mellon Bank or Citibank prime rate, payable monthly. 
In no event will interest under the Foothill Credit Facility be
less than 7% per annum.  The Foothill Credit Facility provided for
a closing fee of $500,000, an annual facility fee of 1/4 of 1% and
a commitment fee of 1/4 of 1% on any unused amount.  The Foothill
Credit Facility also requires LIVE to meet certain financial
ratios, and as of December 31, 1996, the Company was in compliance
with all such financial ratios.  There were no amounts outstanding
under the Foothill Credit Facility as of December 31, 1996.

     On May 27, 1995, LFM entered into a three year extension of its
distribution agreement originally signed in May 1992 with WEA. 
Under the terms of the extension, WEA advanced $10,000,000 to LFM
($20,000,000 had been advanced under the original agreement and
repaid entirely prior to the 1995 extension), recoupable from
distribution revenues during the three year term of the agreement
at $277,778 per month, including interest at LIBOR, plus 0.2%.  On
October 21, 1996 LIVE amended the distribution agreement, to be
effective May 7, 1996, whereby LIVE assumed responsibility of all
sales and sales solicitation services which were previously the
responsibility of WEA.  The amendment also included a reduction in
certain distribution fees shared by WEA, as a result of the shift
in sales and sales solicitation responsibility, and an additional
advance to LIVE of $10,000,000.  The additional advance is
recoupable from distribution revenues during the remaining term of
the agreement at $476,190 per month plus interest at LIBOR plus
0.2%.  In order to obtain the advances, LIVE granted WEA a second
priority security interest in substantially all of LIVE's assets. 
At December 31, 1996 and 1995 there was $13,571,000 and 8,333,000,
respectively, outstanding related to the WEA advances.  The
interest rate on the advance at December 31, 1996  was 5.44%.

     The future maturities of long-term obligations are as follows:

Year Ending December 31,                           (In Thousands)

1997 . . . . . . . . . . . . . . . . . . . . . .       $ 13,472
1998 . . . . . . . . . . . . . . . . . . . . . .         28,026
1999 . . . . . . . . . . . . . . . . . . . . . .         21,249
                                                       $ 62,747

     Interest paid for the years ended December 31 1996, 1995 and
1994 was $5,383,000, $5,131,021, and $8,621,000 respectively,
including $28,482, and $787,000 related to the Company's
discontinued operations in 1995 and 1994, respectively.


Note 8 - Leases

     The Company generally conducts its operations through leased
office facilities.  The Company also leases automobiles, computer
equipment, furniture, fixtures and other equipment.  Most leases
require that the Company perform all necessary repairs and
maintenance, provide insurance and pay taxes assessed against the
leased property.  The terms of leases range from month-to-month to
four years, some of which have renewal options.  Certain rents are
adjusted for increases based upon the Consumer Price Index.  The
leases are classified as operating leases.

     Future minimum operating lease payments for the Company, as of
December 31, 1996 are:

                                                                  
                                                   (In Thousands)
1997 . . . . . . . . . . . . . . . . . . . . . .       $  1,176
1998 . . . . . . . . . . . . . . . . . . . . . .          1,167
1999 . . . . . . . . . . . . . . . . . . . . . .            619
2000 . . . . . . . . . . . . . . . . . . . . . .            118
Total net minimum lease payments . . . . . . . .       $  3,080

     For the years ended December 31, 1996, 1995 and 1994, rent
expense under all operating leases aggregated  $1,017,000,
$1,812,000, and $6,685,000 respectively, including $878,000 and
$5,760,000, related to the Company's discontinued operations in
1995 and 1994, respectively.

Note 9 - Film Costs Obligations

     At December 31, 1996, the unrecorded future obligations for
undelivered film product approximates $20,721,356.  Deposits made
for guaranteed delivery of undelivered film product are recorded as
film costs.

     Certain agreements permit a reduction in the amount of film
right payments when stipulated conditions have not been met.  Many
agreements also contain an obligation for the payment of royalties
above the minimum guarantee if sales exceed a stipulated amount. 
At December 31, 1996, $11,787,000 of royalties payable are included
in film obligations.

Note 10 - Increasing Rate Senior Subordinated Notes Due 1999

     On March 17, 1993, the United States Bankruptcy Court for the
Central District of California (the "Bankruptcy Court") confirmed
a prepackaged plan of reorganization (the "Prepackaged Plan") for
LIVE, providing for the issuance of $40,000,000 in principal amount
of Increasing Rate Senior Subordinated Notes due 1999 (the "LIVE
Increasing Rate Notes").  The LIVE Increasing Rate Notes mature on
March 23, 1999.  Interest accrued on the LIVE Increasing Rate Notes
from September 1, 1992 at 10% per annum and was increased to 12% in
November 1994 through an amendment to the Indenture between the
Company and American Stock Transfer & Trust Company, as Trustee
(the "Indenture") that governed the terms of the 
notes.
     
     Payment of the LIVE Increasing Rate Notes is secured only by
a lien on the Common Stock of LFM, subject and subordinate to a
lien under the Foothill Credit Facility and is subordinated to all
of the Company's present and future senior debt.  The LIVE
Increasing Rate Notes are subject to mandatory redemption of
$20,000,000 of the principal amount on March 23, 1998 and are
redeemable at any time at par plus accrued interest.

     The Indenture restricts the ability of the Company and its
Restricted Subsidiaries (as defined) to incur additional senior
debt and subsidiary senior debt, to make restricted payments and
restricted investments, to merge, consolidate or sell assets of the
Company or its Restricted Subsidiaries, to create liens other than
to secure senior debt, subsidiary senior debt and certain other
permitted debt, or to enter into certain transactions with
affiliates of the Company.

     Interest to maturity of the LIVE Increasing Rate Notes of
$9,176,000 and $13,184,000 at December 31, 1996 and 1995,
respectively, has been included in the carrying value of the LIVE
Increasing Rate Notes, in accordance with Financial Accounting
Standards Board Statement No. 15, "Accounting by Debtors and
Creditors for Troubled Debt Restructurings," and will not be
recognized as interest expense in current and future years.

Note 11 - Income Taxes

     As discussed in Note 1, the Company records its income tax
provision in accordance with SFAS No. 109.

Income (loss) From Continuing Operations Before Income Taxes is as
Follows:

                                                      December 31,   
                                              1996        1995       1994
                                                     (In Thousands)

Domestic . . . . . . . . . . . . . . .     $ 4,563     $ 11,391  $  (7,945)
Foreign. . . . . . . . . . . . . . . .          --           --     (1,529)
                                           $ 4,563     $ 11,391  $  (9,474)

Income Tax Expense From Continuing Operations

                                                      December 31,   
                                              1996        1995       1994
                                                     (In Thousands)
Currently payable:
Federal. . . . . . . . . . . . . . . .     $    --     $    108  $      --
State. . . . . . . . . . . . . . . . .          --          172       (494)
Foreign. . . . . . . . . . . . . . . .          --           --         70
                                                --          280       (424)
Deferred:
Federal. . . . . . . . . . . . . . . .       6,000           48        624
State. . . . . . . . . . . . . . . . .       2,000          272         --
                                             8,000          320        624
                                           $ 8,000     $    600  $     200


Components of Deferred Income Taxes
                                                        December 31,   
                                              1996        1995       1994
                                                     (In Thousands)

Film costs . . . . . . . . . . . . . .     $ 8,007     $     13  $     368
Sales returns and other 
  allowances . . . . . . . . . . . . .         197          290         35
Accelerated depreciation and 
  basis reduction. . . . . . . . . . .         (35)          (2)         3
Accruals not currently 
  deductible for tax purposes. . . . .        (169)          19        218
                                           $ 8,000     $    320  $     624


Reconciliation of Effective Rate of Income Taxes

                                               Percentage of Income (Loss)      
                                                        December 31,  
                                              1996        1995       1994

Tax provision  . . . . . . . . . . . .     $ 8,000     $    600  $     200
Book income (loss) . . . . . . . . . .     $ 4,563     $ 11,391  $  (9,474) 
Effective tax rate . . . . . . . . . .      175.3%         5.3%      (2.1)%

Federal statutory rate . . . . . . . .       35.0%        35.0%       35.0%
State income taxes . . . . . . . . . .       28.9          3.9        (3.0)
Alternative minimum tax effect, other       117.1         (1.2)       (1.2)
Utilized net operating loss. . . . . .      (34.0)        (4.5)      (17.6)
Loss related to foreign operations . .         --        (49.2)       (0.7)
Foreign deemed dividend. . . . . . . .         --          9.2        (0.1)
Goodwill amortization. . . . . . . . .       28.3         12.1       (14.5)
                                                      
  Effective tax rate . . . . . . . . .      175.3%         5.3%       (2.1)%

Components of Deferred Tax Liabilities and Assets

                                              1996        1995     
Deferred tax liabilities:
  Amortization of film costs and other .  $(16,685)    $ (8,451)
    Total deferred tax liabilities . . .   (16,685)      (8,451)
  Deferred tax assets:                    
  Sales returns and other allowances .         585          726
    Accelerated depreciation . . . . . .        94          139
    Accruals not currently deductible. .     1,319          322
    Other. . . . . . . . . . . . . . . .        --           79      
    Tax effect of NOL carryforward . . .     8,953       12,319
    Tax basis difference - debt. . . . .     3,706        4,614
                                            14,657       18,199
                                                                          
    Less valuation allowance . . . . . .   (14,657)     (16,332)
    Net deferred tax assets. . . . . . .        --        1,867
      Total deferred tax 
        assets/(liabilities) . . . . . .  $(16,685)    $ (6,584)


    Income taxes paid for the years ended December 31, 1996 and
1995 and 1994 were $356,449, $421,936 , and $1,456,000,
respectively, including $580,000, related to the Company's
discontinued operations in 1994.  The valuation allowance has
decreased $1,675,000, from $16,332,000 at December 31, 1995 to $14,657,000
at December 31, 1996 primarily due to fluctuations in temporary 
differences.

    During 1995 and 1994, $3,000,000 and  $3,874,000 of
undistributed earnings of the Company's foreign subsidiaries were
deemed remitted as a dividend in accordance with certain provisions
of the U.S. Internal Revenue Code ("I.R.C.").  The related taxes
were provided for these deemed dividends in the Company's U.S. tax
provision.  Effective September 13, 1994 LEI-IVE Entertainment N.V.
was domesticated as a Delaware corporation under the name LIVE
Entertainment International Inc.  Such reorganization did not
result in United States or California tax liability to the Company.

    On March 17, 1993, the Bankruptcy Court confirmed the
Prepackaged Plan.  In accordance with the I.R.C., this
reorganization has caused a "change in ownership" which resulted in
a limitation on the future utilization of the Company's net
operating loss carryforwards beginning with the year ending
December 31, 1993.  The annual limitation is approximately
$1,600,000 per year subject to certain increases relating to built-
in gain items.

    At December 31, 1996, approximately $26,000,000 of net
operating loss carryforwards are available for regular federal tax
return purposes.  In accordance with Section 108 of the I.R.C., the
Company was required to reduce its "tax attributes" due to the
confirmation of the Prepackaged Plan.  This resulted in the
reduction of net operating loss carryforwards by approximately
$35,000,000.  Remaining federal net operating losses of $26,000,000
for regular income tax purposes, of which $20,000,000 are subject
to annual limitations as described above, will expire between the
years 2006 and 2010.  State net operating loss carryforwards of
$13,000,000 were absorbed by the reduction in "tax attributes" due
to the confirmation of the Prepackaged Plan.  Remaining net 
operating losses for state tax purposes of $2,500,000 will expire
between the years 2009 and 2010.  For federal Alternative Minimum
Tax ("AMT") return purposes, $1,000,000 of net operating loss
carryforwards are available after the reduction in "tax
attributes."  AMT net operating loss carryforwards will expire in
2010.  AMT credits of $2,000,000 and foreign tax credits of $50,000
are available to offset future regular federal income tax
liabilities.  The disposal of the Specialty Retail Division on
August 31, 1994 resulted in a capital loss of approximately
$30,000,000 for regular tax purposes and $31,600,000 for AMT
purposes, which may be carried forward, but expire in 1999.  State
capital loss carryforwards are $15,000,000 which expire in 1999. 
The disposal of VCL on September 30, 1995, resulted in a capital
loss of approximately $10,000,000 for both regular tax and AMT
purposes, which may be carried forward but expire in 2000.

    The Company is currently under examination by the Internal
Revenue Service ("IRS") for the years ended 1989 through 1994 and
by the California Franchise Tax Board for the years ended 1988
through 1990. In connection with their examination the Company has
received certain proposed adjustments from the IRS for the 1989
through 1991 tax years, the impact of which may be to significantly
increase the Company's taxable income and related tax liability in
certain years under examination.  The Company is in the process of
analyzing the proposed adjustments, alternatives available to the
Company and the potential impact the proposed adjustments will
have. While the outcome of the examination is unknown, in the
fourth quarter of 1996 the Company recorded an additional provision
for income taxes and interest thereon related to the years under
examination of approximately $7,100,000.  Based on the most recent
discussions between the Company and the tax authorities the Company
believes, that with the additional provision  for income taxes
recorded in 1996, it has provided adequate reserves to cover its
income tax liabilities at December 31, 1996.

Note 12 - Stockholders' Equity

    The Series B Preferred Stock has a liquidation value of $10.00
per share.  Holders of the Series B Preferred Stock are entitled to
an annual dividend, payable quarterly, which accrued from September
1, 1992 at 5% ($0.50 per share) if paid in cash or 8% if paid in
kind ("PIK") and increased on May 1, 1996 to 10% ($1.00 per share)
if paid in cash and 12% if PIK.  Dividends of $3,081,000 ($0.81 per
share) in 1996, $2,198,000 ($0.52 per share) in 1995, and $3,000,000
($0.50 per share) in 1994 were accrued on the Series B 
Preferred Stock and were paid beginning in March 1993 and quarterly
thereafter.  The Company may redeem the Series B Preferred Stock at
any time at 100% of the liquidation value, plus accrued dividends. 

    Although LIVE has no obligation to redeem any Series B
Preferred Stock, subject to the availability of funds and the prior
approval of its Board of Directors and its lenders, LIVE may
acquire shares of its Series B Preferred from time to time, either
through private purchases or through open market purchases.  On
December 9, 1994, and March 7, 1995, LIVE acquired, and
subsequently retired, 400,000 shares and 1,400,000 shares,
respectively, of the Series B Preferred Stock at average prices
under $4.00 per share.  In addition, in March 1996 the Company
purchased 377,500 shares of the Series B Preferred Stock at an
average price of approximately $6.00 per share.

    Holders of the Series B Preferred Stock are entitled to elect
four members, or under certain circumstances, a majority of the
Company's Board of Directors.  No other voting rights exist.  In
addition, commencing May 1, 1996, holders can convert the Series
B Preferred Stock into LIVE Common Stock.  The conversion price per
share is obtained by dividing the liquidation value by either the
market price of the Common Stock or the "Floor Price."  The Floor
Price is initially $20.00 per share of Common Stock, decreasing
$1.25 per share at the end of each three month period thereafter. 
On September 1, 1998, the conversion price will be reset to the
lower of the market price or $5.00 per share, resulting in the
potential issuance of a minimum of approximately 7,600,000 shares
of the Company's Common Stock based upon the number of Series B
Preferred Stock shares outstanding as of March 15, 1997.

    See also a description of the Company's Series C Preferred
Stock in Note 2 - Series C Preferred Stock.

    The Company's Stock Option and Stock Appreciation Rights Plan
(the "Plan") provides for the granting of incentive stock options,
non-qualified stock options and stock appreciation rights ("SARs")
to its officers, directors, key employees, consultants and other
persons.  Options to purchase a maximum of 700,000 shares of the
Company's Common Stock, of which 120,000 may be granted as SARs,
are available under the Plan.  The options vest over varying
periods and expire in 10 years.  

    During 1996 the Stock Option Committee of the Board of
Directors granted to certain current employees of LIVE and LFM a
total of 274,400 options of which 6,750 were subsequently exercised
or canceled at an average  exercise price of $3.50, the closing
price of the Common Stock on The Nasdaq Stock Market's National
Market on the day of the grants.  The options vest ratably over
periods ranging from two to three years.

    On March 6, 1995, the Stock Option Committee of the Board of
Directors granted to all current employees and Directors of LIVE
and LFM (other than members of the Stock Option Committee) who were
holders of options pursuant to the Company's 1988 Stock Option and
Stock Appreciation Rights Plan, as amended (the "1988 Plan"), the
option to agree to cancel certain options (the "Canceled Options")
and to receive in return therefor new options (the "New Options")
pursuant to the 1988 Plan, all on the following terms and
conditions: (i) the exercise price for the New Options would equal
$3.50, the closing price of the Common Stock on the SmallCap Market
on March 6, 1995, (ii) fifty percent (50%) of the New Options would
vest on March 6, 1996; the remainder would vest on March 6, 1997,
provided that no New Options would vest earlier than the scheduled
vesting date for the corresponding Canceled Options, and (iv) all
New Options would expire on the expiration date of the
corresponding Canceled Options.



    A summary of stock option transactions during the three years
ended December 31, 1996 follows:

                                Number of    Option Price    Weighted Avg
                                 Shares       Per Share     Exercise Price
                                                 ($)              ($)
  
  Stock options outstanding: 
  December 31, 1993. . . . .    298,210      8.75 - 70.00        11.45
    Canceled . . . . . . . .    (86,380)     8.75 - 70.00        12.45
    Granted. . . . . . . . .     86,570      2.75 - 15.63        13.13
  December 31, 1994. . . . .    298,400      8.75 - 70.00        11.64
    Canceled . . . . . . . .   (297,600)     3.50 - 15.63        11.42
    Granted. . . . . . . . .    275,140      2.75 -  4.25         3.50
  December 31, 1995. . . . .    275,940      2.75 - 14.38         3.75
    Canceled . . . . . . . .    (13,070)     3.25 -  3.50         3.44
    Exercises. . . . . . . .    (29,850)     2.75 -  3.50         3.46
    Granted. . . . . . . . .    274,400      3.25 -  6.75         3.59
  December 31, 1996. . . . .    507,420      2.75 - 14.38         3.69


     At December 31, 1996, 1995, and 1994, 137,135, 23,300, and
133,260 options were exercisable, at an average exercise price of
$4.03, $6.55, and $12.76 per share respectively.  No stock
appreciation rights were outstanding.  Options to purchase 138,530
(1996), 99,860 (1995), and 76,860 (1994) shares of the Company's
Common Stock were available for grant under the Plan.

     At December 31, 1996, 1995, and 1994, 507,420, 275,940, and
298,400 shares of Common Stock were reserved for future issuances
related to options, respectively.  At December 31, 1996, 1995,
and 1994, 3,370,128, 1,130,170, and 1,075,753 shares of Common
Stock were reserved for future issuances related to the conversion
of Preferred Stock, respectively.

     Warrants to purchase 7,000 shares of the Company's Common
Stock were issued during 1990 and were outstanding as of December
31, 1996.  These warrants are currently exercisable at $72.50 per
share (fair market value at the date of grant) and expire in 2000.

     In 1993, the Company issued warrants to purchase 266,666 and
200,000 shares of the Company's Common Stock at a price of $10.00
and $13.60 per share, respectively.  The warrants are exercisable
until March 1998 and the holders have been granted demand and
piggyback registration rights for the Common Stock underlying the
Warrants.  

     The Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB25)
and related Interpretations in accounting for its employee stock
options because, as discussed below, the alternative fair value
accounting provided for under FASB Statement No. 123, "Accounting
for Stock-Based Compensation," ("Statement 123") requires use of
option valuation models that were not developed for use in valuing
employee stock options.  Under APB 25, because the exercise price
of the Company's employee stock options equals the market price of
the underlying stock on the date of grant, no compensation expense
is recognized.

     The 1988 Stock Option and Stock Appreciation Rights Plan, as
amended, (the "1988 Plan"), has authorized the grant of options to
management personnel for up to 700,000 shares of the Company's
common stock.  All options granted have 10 year terms, vest and
become fully exercisable at the end of 3 years of continued
employment.

     Pro forma information regarding net income and earnings per
share is required by Statement 123, and has been determined as if
the Company had accounted for its employee stock options under the
fair value method of that Statement.  The fair value for these
options was estimated at the date of grant using a the Black-Scholes
option pricing model with the following weighted-average
assumptions for 1996 and 1995: risk-free interest rate of 6.1% and
6.0%, respectively; dividend yields of 0% for both periods;
volatility factors of the expected market price of the Company's
Common Stock of .685 and .667 respectively, and an expected
life of the option of 5 years.  The weighted average fair value of
options granted during the year was $2.23 and $2.13 for the years 
ended December 31, 1996 and 1995 respectively.

     The Black-Scholes option valuation model was developed for use
in estimating the fair value of traded options which have no
vesting restrictions and are fully transferable.  In addition,
option valuation models require the input of highly subjective
assumptions including the expected stock price volatility.  Because
the Company's employee stock options have characteristics
significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable measure of the fair
value of its employee stock options.

     Had compensation expense for the options been determined on
the fair value at the grant dates for awards consistent with
Statement 123, the Company's net (loss) income, net (loss) income
attributable to Common Stock and net (loss) income per share would
be as follows (in thousands except for earnings per share
information):

     
                                             1996              1995
  
  Pro forma net (loss) income. . . . . .   $(3,747)          $10,619
  Pro forma net (loss) income
    attributable to Common Stock:
      Primary. . . . . . . . . . . . . .   $(7,699)          $ 3,083
      Fully Diluted. . . . . . . . . . .   $(7,699)          $10,619
  Pro forma (loss) earnings 
    per common share:
      Primary. . . . . . . . . . . . . .    $(3.15)            $1.27
      Fully diluted. . . . . . . . . . .    $(3.15)            $0.52
                                                                                

     Since compensation expense associated with option grants is
recognized over the vesting period, the initial impact of applying
Statement 123 on pro forma net (loss) income, pro forma net (loss) income 
attributable to Common Stock, and pro forma (loss) income per share is 
not representative of the potential impact on pro forma amounts in future 
years, when the effect of the recognition of a portion of compensation 
expense from multiple awards would be reflected.

     The following table summarizes information about stock options
outstanding at December 31, 1996:
<TABLE>
<CAPTION>
Options Outstanding                                                   Options  Exercisable 
                                 Weighted Avg   
Range of           Number        Remaining            Weighted Avg    Number         Weighted Avg
Exercise Prices    Outstanding   Contractual Life     Exercise Price  Exercisable    Exercise Price
<S>                <C>           <C>                  <C>             <C>            <C>
$2.75 - $3.25      103,650       9.05                 $3.22            28,000        $ 3.15
 3.50 -  4.25      392,970       7.82                  3.61            98,335          3.51
 4.50 -  6.25        1,000       9.53                  5.00             1,000          5.00
 6.50 - 10.25        2,000       9.34                  6.75             2,000          6.75 
10.50 - 14.38        7,800       5.85                 12.93             7,800         12.93
                   507,420                                            137,135
</TABLE>

Note 13 - Stockholders' Rights Plan

     In July 1990, and as amended as of April 1, 1992 and August 13, 
1996, the Board of Directors of LIVE adopted a Stockholders'
Rights Plan and declared a dividend of one preferred stock purchase
right (a "Right") for each outstanding share of Company Common
Stock.  Among other provisions, each Right may be exercised to
purchase one one-hundredth share of LIVE's Series R Junior
Participating Cumulative Preferred Stock at an exercise price of
$90, subject to adjustment (the "Exercise Price").  The Rights may
only be exercised after a party, exclusive of LIVE, Pioneer, or an
approved 20% stockholder, or their affiliates, has acquired or
obtained the right to acquire 20% or more of the Company's Common
Stock or in the event certain mergers or sales of assets by LIVE
occur.  The Rights, which do not have voting rights, expire on July
19, 2000 and may be redeemed by the Company at a price of $.01 per
Right at any time prior to their expiration or the acquisition of
20% of the Company's Common Stock by any person other than LIVE,
Pioneer or their affiliates.

     In the event a party other than LIVE, Pioneer, or an approved
20% stockholder, or their affiliates, acquires 20% or more of the
Company's outstanding Common Stock in accordance with certain
defined terms, each Right will entitle its holder to purchase, at
the Right's then Exercise Price, a number of shares of Company
Common Stock having a market value of twice the Right's Exercise
Price.  The independent directors of LIVE may elect to exchange the
Rights at an exchange ratio of one share of Company Common Stock
per Right upon the occurrence of certain defined acquisition
events.  If certain mergers or sales of assets by LIVE occur, each
Right shall entitle the holder to purchase, at the Exchange Price,
a number of shares of common stock of the surviving corporation or
purchaser (so long as it is not LIVE) having a market price of two
times the Exercise Price.

Note 14 - Related Party Transactions

     In December 1994, as part of an agreement settling all open
accounts between them, LIVE and Carolco agreed that all individual
films previously delivered to LFM or LI under either the Domestic
Master Agreement or the German Master Agreement would no longer be
cross-collateralized with other films, either within individual
packages or among so called "film packages"; the companies also
agreed that for purposes of their settlement only, all such films
would be deemed to have earned the minimum distribution fee that
was guaranteed to LFM and LI.  In connection with this agreement
in 1994, LIVE wrote off the remaining unpaid receivable amount of
$6,211,000 that LIVE had recorded in its financial records as owing
from Carolco (of which all but $2,177,000 was reserved for in prior
years).

     Pursuant to an agreement dated October 1995, which amended and
extended an original agreement dated October 1991, LFM granted
Pioneer a license for United States laser videodisc rights to LFM's
library of motion pictures (subject to certain reserved rights) for
a term ending in September 1998.  Pioneer paid LFM a total of
$4,600,000 ($2,300,000 in March 1996 and $2,300,000 in August 1996)
under this agreement as a non-returnable advance recoupable on a
cross-collateralized basis from all royalties payable to LFM under
the agreement.

     In September of 1996, as part of an employment agreement, an
employee was advanced fees of $400,000 reflecting commitments by
the employee in connection with existing films to which the Company
is acquiring distribution rights.  The advance is to be repaid,
plus interest, out of fees earned from future revenues from these
films.  The employee is to guaranty the repayment of this advance.

     On February 8, 1996, the Company and Pioneer LDC, Inc.
("PLDC") entered into an Output Deal Agreement (the "Pioneer Output
Agreement") for the distribution of the Company's theatrical
production in Japan.  The three year agreement includes all
theatrical films that LIVE produces and acquires over the period,
excluding two of LIVE's features released in 1996, The Substitute
and The Arrival.  PLDC has agreed to pay a specified percentage of
the applicable film's production or acquisition cost to obtain such
Japanese distribution rights.  PLDC is an affiliate of the
Company's controlling shareholder, Pioneer Electronic Corporation.

     In July 1994, a subsidiary of LFM and an affiliate of Pioneer
reached an agreement whereby the Pioneer affiliate will receive the
Japanese theatrical, video and television distribution rights to
the films Wagons East, Top Dog, The Beans of Egypt, Maine and Goldy
III.

     In 1993, Jefferson Capital, (an affiliate of a former director
of the Company), and the then co-financial advisor, received a
$150,000 non-refundable retainer to assist the Company in
structuring and placing a long-term working capital facility for
LFM and to make recommendations regarding the Company's capital
structure.  In addition, each of Jefferson Capital and the co-
financial adviser received warrants to purchase 3,333 and 2,941
shares of the Company's Common Stock at a price of $10.00 and
$13.60 per share, respectively.  In 1994 these parties assisted the
Company in negotiating and obtaining the Foothill Credit Facility
and received a total fee of $300,000 for such services.

      In October 1994, LIVE retained Jefferson Capital as its
advisor in connection with LIVE's efforts to obtain the agreement
of the holders of the LIVE Increasing Rate Notes to eliminate the
minimum net worth covenant contained in the Indenture.  Jefferson
Capital received a total fee of $200,000 (one half paid in October
1994 and the second half paid in November 1994) for investment
banking services provided in connection with such efforts. 
Jefferson Capital's fee was not contingent upon the success of
LIVE's efforts to amend the Indenture.  LIVE also agreed to
reimburse Jefferson Capital for its reasonable out-of-pocket
expenses, including legal fees, and to indemnify Jefferson Capital
against certain liabilities, including liabilities under the
federal securities laws, relating to or arising out of services
performed by Jefferson Capital for this engagement.

     In August 1995, Jefferson Capital assisted the Company in
obtaining film project financing from a bank and received a total
fee of $50,000 for such services.

     In connection with the Restructuring, a director of the
Company and Jefferson Capital received a total of $630,000, plus
expenses.  The director received $92,000 of such amount.

     Any and all agreements with Jefferson Capital were terminated
by the Company in May 1995.

     In 1993, the Company's former Chairman of the Board was issued
warrants to purchase 2,941 shares of the Company's Common Stock at
a price of $13.60 per share.

     The Company and the former Chairman of the Board are parties
to an agreement dated December 1993, pursuant to which the Company
agreed, for a term ending in June 1997, to pay the 
former Chairman $25,000 per month, plus normal directors expenses 
and other out-of-pocket expenses he may incur in connection with 
his services to the Company, in return for the former Chairman 
making himself available to the Company or any video subsidiary 
thereof to act as a consultant for the period ending June 30, 1997.  
Such compensation is payable as long as the former Chairman makes 
himself available for such purpose, whether or not the Company actually 
utilizes his services and whether or not any particular Chief Executive 
Officer is in the Company's employ.

Note 15 - Incentive Savings Plan

     The Company has established the LIVE Incentive Savings Plan,
a profit sharing and 401(k) savings plan, in which eligible
employees of LIVE and LFM may participate.  Each employee who has
attained the age of 21 may become a participant as of the beginning
of each calendar quarter when such employee has completed 1,000
hours of service in the relevant one-year computation period.  The
Company, at the discretion of the Board of Directors, may make
annual contributions to the LIVE Incentive Savings Plan.  The
Company's profit sharing contributions are allocated to individual
accounts of participants in proportion to their compensation.  A
participant is fully vested in his or her tax-deferred employee
contributions at all times.  A participant whose employment
terminates for any reason other than death or disability is
entitled only to the vested portion of the contributions made by
the Company on behalf of the plan participant.  The LIVE Incentive
Savings Plan permits tax-deferred voluntary employee contributions
of an amount equal to not more than 10% of compensation, to be
matched by a LIVE contribution in an amount equal to 50% of the
employee's voluntary contributions which do not exceed 6% of his or
her compensation.  With certain exceptions, contributions made by
the Company vest equally over a period of four years.  Company
contributions to the LIVE Incentive Savings Plan were 
$121,968, $95,000, and $46,000 for the years ended December 31, 1996, 1995
and 1994, respectively.

Note 16 - Major Customers, Suppliers, and Geographic Areas 
                
     During the year ended December 31, 1996, one customer accounted for 
12.5% of net sales of LIVE and during the year ended December 31, 1995, 
two customers accounted for 17.4% and 16.6%, respectively, of net sales 
of LIVE.  During the year ended December 31, 1994, two customers accounted 
for 11.0% and 12.3%, respectively, of net sales of LIVE.
     
     The Company is party to a license agreement which granted the
Company certain home video rights to certain Christmas and other
seasonal video programs.  This agreement expires at the end of
1997.  Programs under this agreement provided 9.7%, 9.7%, and 11.0%
of the Company's total net revenue for the year ended December 31,
1996, 1995, and 1994 respectively.

Export Revenue by Geographic area for the year ended December 31,
1996 consists of:

Europe                     $13,102
Asia                         6,500
Latin America                1,232
Australia/New Zealand        1,459
Other                          462
Total                      $22,755

Note 17 - Commitments and Contingencies

     Employment and Separation Agreements:

     The Company has employment agreements with certain of its
officers generally for a term of one to four years.  Future minimum
payments under these contracts are approximately $3,792,000,
$3,432,000, $2,994,000, and $812,000 for the years ending December 31, 1997, 
1998, 1999, and 2000.

     Legal Proceedings:

     LIVE had been the defendant in two purported class action law
suits that were filed in 1992.  The Company had requested the U.S.
District Court to dismiss both cases for non-prosecution due to the
fact that the plaintiffs had taken no action in either of these
cases for over one year.  On April 8, 1996, the U.S. District Court
granted LIVE's request and dismissed both cases.

     In May 1994, a breach of contract claim was filed against a
subsidiary of the Company, claiming nonpayment of royalties from
licensing of films in foreign territories and deprivation of
royalty payments as a result of misallocation of certain values
asserted with licensed film properties.  Films subject to the
complaint were contained in the assets of Vestron, Inc. purchased
by the Company in July 1991, and the period covered included the
license periods both prior to, and subsequent to, the acquisition
date by the Company.  The Company filed a reply brief (including a
Motion to Dismiss) on October 5, 1994, and such Motion to Dismiss
was granted on the grounds of forum non conviens.  Plaintiff filed
a complaint in New York on March 22, 1995.  The Company filed its
answer, affirmative defenses and counterclaim on April 20, 1995. 
Plaintiff filed a motion for class certification on September 8,
1995 to which the Company filed its opposition to the motion on
November 6, 1995.  After limited pre-trial discovery, a motion for
class certification was argued on December 6, 1995.  By order dated
June 21, 1996 and filed on June 25, 1996, the Court in this action
determined that the action should be maintained as a class action
under the provisions of  901(a) of the New York Civil Practice Law
and Rules.  The Company filed an appeal from the Order granting
class certification on July 19, 1996 and filed a Motion for
Decertification of the class on July 24, 1996.  A hearing on the
motion was heard on September 4, 1996 and on December 24, 1996 the
Court denied the Company's Motion for Decertification.  On February 7, 
1997 the company filed a combined appeal from the order granting
a class certification and the dismissal of the Motion for
Decertification, which will be considered by the New York State
Appellate Division in April 1997.

     Management and counsel to LIVE are unable to predict the
ultimate outcome of the above-described actions at this time. 
However, LIVE and the other defendants believe that these
lawsuits are without merit and intend to defend them vigorously. 
Accordingly, no provision for any liability which may result has
been made in LIVE's consolidated financial statements.  In the
opinion of management, these actions, when finally concluded and
determined, will not have a material adverse effect upon LIVE's
financial position or results of operations.

     Other than as described above, there are no material legal
proceedings to which LIVE or any of its subsidiaries are a party
other than ordinary routine litigation in the course of
business.  In the opinion of management (which is based in part on
the advice of outside counsel), resolution of these matters will
not have a material adverse impact on LIVE's financial position or
results of operations.

Note 18 - Rationalization
          
     In March 1996, the Company retained the Carreden Group,
Incorporated ("Carreden") to act as its exclusive financial advisor
in connection with a review of the Company's current
capitalization.  Carreden was retained to advise the Company's
Board of Directors in a review of the Company's business operations
and capital structure and to develop alternatives that will
accomplish the strategic and financial objectives of the Company by
securing for the Company a more stable and appropriate capital base
on which to operate in the future.

     On August 21, 1996 the Company filed a Schedule 13E-4 with the
Securities and Exchange Commission which outlined a proposed
exchange offer and equity recapitalization plan (the "Equity
Rationalization").  In addition, the Company is seeking to replace
its existing $30,000,000 Foothill Credit Facility with a larger
working capital facility, and to refinance its current outstanding
$40,000,000 of LIVE Increasing Rate Notes.  The Company continues to
negotiate financing terms for an exchange offer.  In addtion, the 
Company has been approached about a possible transaction involving
the sale of the entire Company.  Any such transactions would be subject
to a number of conditions, and there is no assurance that either of 
these transactions, or any other transactions, will be finalized or 
completed.  The Company believes that the Equity Rationalization, 
if completed, will simplify its existing complex capital structure, 
provide additional liquidity for growth and expansion, and reduce 
the cash dividend cost of its existing equity securities.  Failure 
of the Company to consummate an equity rationalization plan at this 
time would require the Company to begin accumulating cash to retire 
LIVE Increasing Rate Notes, of which $20,000,000 are due in 1998 and the
remaining $20,000,000 in 1999, and would therefore reduce the funds
available for the Company's operations.  The completion of the
Equity Rationalization is subject to completing satisfactory
documentation for refinancing sources of senior and subordinated
debt, approval by the Company's Board of Directors, shareholders,
and regulatory agencies, completion of legal documentation, and
acceptance of the tender offer if and when made.  As such, no
assurances can be given that the Company's efforts will be
successful.

<TABLE>Note 19 - Quarterly Financial Information (Unaudited)

     Certain quarterly financial information is presented below:
<CAPTION>
                                        First        Second      Third        Fourth
                                        Quarter      Quarter     Quarter      Quarter     Year
                                            (Amounts in Thousands, Except Per Share Data)
<S>                                     <C>          <C>         <C>          <C>         <C>   
1996
  Net sales  . . . . . . . . . . . . .  $ 22,553     $ 50,269    $ 36,440     $ 42,163    $151,425
  Gross profit . . . . . . . . . . . .     5,840        7,294       6,349        4,382      23,865
  Operating profit (loss). . . . . . .       997        2,117       1,281         (361)      4,034
  Income (loss) before income taxes. .     1,289        2,325       1,209         (260)      4,563
  Net income . . . . . . . . . . . . .       967        1,743       1,209       (7,356)     (3,437)
  Preferred dividends. . . . . . . . .       699        1,039       1,006        1,208       3,952
  Net income (loss) attributable
    to Common Stock. . . . . . . . . .       268          704         203       (8,564)     (7,389)
  Net income (loss) per 
    common share: 
      Primary  . . . . . . . . . . . .      0.10         0.28        0.08        (3.50)      (3.03)
      Fully Diluted  . . . . . . . . .      0.08         0.17        0.08        (3.50)      (3.03)

Fourth Quarter Adjustments

     During the fourth quarter of 1996 the Company recorded an
additional provision for income taxes of $7,100,000 as a result of
certain adjustments proposed by the Internal Revenue Service in
connection with its examination of the Company's 1989 through 1991
tax returns.

1995
  Net sales (1). . . . . . . . . . .    $ 44,505     $ 22,456    $ 40,060     $ 33,091    $140,112
  Gross profit . . . . . . . . . . .       9,949        5,077       3,246        8,815      27,087
  Operating profit . . . . . . . . .       5,359          936       1,400        3,131      10,826
  Income before income taxes . . . .       5,404        1,159       1,595        3,233      11,391
  Net income . . . . . . . . . . . .       4,904        1,059       1,595        3,233      10,791
  Accretion in redemption value of
    Series B Preferred Stock . . . .       1,571        1,259       1,259          420       4,509
  Preferred dividends. . . . . . . .         859          716         696          756       3,027
  Net income (loss) attributable 
    to Common Stock. . . . . . . . .       2,474         (916)       (360)       2,057       3,255
  Net income (loss) per common share:
      Primary. . . . . . . . . . . .        1.02        (0.38)      (0.15)        0.84        1.34
      Fully Diluted  . . . . . . . .        0.29        (0.38)      (0.15)        0.21        0.53
<FN>
(1) Excludes net sales of VCL for each of the fiscal quarters of 1995
    of $9,779, $8,446, $5,261 and $8,771, respectively.
</FN>
</TABLE>

<PAGE>
                 
<TABLE>               LIVE ENTERTAINMENT INC. AND SUBSIDIARIES

              SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
           Column A                             Column B                Column C             Column D       Column E
                                                                        Additions          
                                                Balance at      Charged to      Charged to                  Balance at
                                                Beginning       Costs and       Other                       End
           Description                          of Period       Expenses        Accounts      Deductions    of Period 
                                                                    (Dollar Amounts in Thousands)
<S>                                             <C>             <C>             <C>           <C>           <C>
Year ended December 31, 1996 Deducted from
 Asset Accounts:
                                                                                
 Allowance for future sales returns. . . . .    $14,451         $17,819 (a)         --        $17,008 (b)   $15,262
 Allowance for doubtful accounts . . . . . .      1,007             132           (296)             3 (c)       840
 Allowance for advertising . . . . . . . . .      3,419          12,234           (820)        10,056 (d)     4,777
 Allowance for overstock inventory . . . . .      2,441             931             70            258 (e)     3,184
 Allowance for film rights in excess 
   of net realizable value . . . . . . . . .      2,397              --            475          1,497 (f)     1,375
   

Year ended December 31, 1995 Deducted from
 Asset Accounts:

 Allowance for future sales returns. . . . .    $10,847         $17,926 (a)         --        $14,322 (b)   $14,451
 Allowance for doubtful accounts . . . . . .      1,742             103             12            850 (c)     1,007
 Allowance for advertising . . . . . . . . .      6,881           7,499         (2,000)         8,961 (d)     3,419
 Allowance for overstock inventory . . . . .      2,688             637             --            884 (e)     2,441
 Allowance for film rights in excess 
   of net realizable value . . . . . . . . .      1,323              --          1,368            294         2,397


Year ended December 31, 1994 Deducted from
 Asset Accounts:

 Allowance for future sales returns. . . . .    $17,806         $11,554 (a)         --        $18,513 (b)   $10,847
 Allowance for doubtful accounts . . . . . .      1,441              75            256             30 (c)     1,742
 Allowance for advertising . . . . . . . . .      6,193          10,633             --          9,945 (d)     6,881
 Allowance for overstock inventory . . . . .      4,501             469             --          2,282 (e)     2,688
 Allowance for film rights in excess 
   of net realizable value . . . . . . . . .      1,323              --             --             --         1,323
           
<FN>
(a)      Amounts represent the gross profit impact of anticipated sales 
         returns.
(b)      Gross profit impact of returns credited to customer accounts during 
         the year.
(c)      Net amount of accounts written-off and recoveries during the year.
(d)      Reimbursements for co-op advertising.
(e)      Disposal of overstock inventory.
(f)      Write-off of film rights.
</FN>
</TABLE>












                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549










                                 EXHIBITS

                                    To

                                 Form 10-K

                                    Of

                          LIVE ENTERTAINMENT INC.

                For the fiscal year ended December 31, 1996

















<PAGE>
                             INDEX TO EXHIBITS


                                                               Sequentially
Exhibit                                                            Numbered
Number                          Description                        Page    

2.1   Agreement and Plan of Merger dated as of August
      31, 1994 among the Registrant, Strawberries Inc.,
      Strawberries Merger Corp. and Strawberries
      Holding, Inc. (without exhibits) (incorporated by
      reference to Exhibit 2.1 to Registrant's Current
      Report on Form 8-K dated September 15, 1994) . . 

2.2   Agreement and Plan of Merger dated as of August
      10, 1994 among Carolco Pictures Inc., the
      Registrant and Carolco Acquisition Corp.
      (including certain exhibits) (incorporated by
      reference to Exhibit 2 to Mario F. Kassar and New
      Carolco Investments B.V.'s Schedule 13D (Amendment
      No. 14) under the Securities Exchange Act of 1934
      filed with the Commission on August 16, 1994). . 

2.3   Termination Agreement, dated as of October 13,
      1994, among the Registrant, Carolco Acquisition
      Corp. and Carolco Pictures Inc. (incorporated by
      reference to Exhibit 10.1 to Current Report on
      Form 8-K of Carolco Pictures Inc. filed with the
      Commission on October 13, 1994). . . . . . . . . 

3.1   Restated Certificate of Incorporation of the
      Registrant (incorporated herein by reference to
      Appendix C of Registrant's Registration Statement
      No. 33-24396). . . . . . . . . . . . . . . . . . 

3.2   Form of Certificate of Amendment to Restated
      Certificate of Incorporation of the Registrant
      (incorporated herein by reference to Exhibit 20 to
      the Registrant's Schedule 13E-4, filed on December
      15, 1992, as amended). . . . . . . . . . . . . . 

3.3   Form of Certificate of Designations, Preferences
      and Relative, Participating, Optional or Other
      Special Rights of Series B Cumulative Convertible
      Preferred Stock of the Registrant (incorporated
      herein by reference to Exhibit 36 to the
      Registrant's Schedule 13E-4, filed on December 15,
      1992, as amended). . . . . . . . . . . . . . . . 

3.4   Amended Certificate of Designations, Preferences
      and Rights of Series C Cumulative Convertible
      Preferred Stock of the Registrant (incorporated
      herein by reference to Exhibit 3.4 to the
      Registrant's Annual Report on Form 10-K for the
      fiscal year ended December 31, 1992) . . . . . . 

3.5   Certificate of Designations specifying the terms
      of the Series R Junior Participating Preferred
      Stock, par value $1.00 per share, of the
      Registrant, filed with the Secretary of State of
      the State of Delaware (incorporated herein by
      reference to Exhibit 3 to the Registrant's Current
      Report on Form 8-K, dated August 1, 1990). . . . 

3.6   Form of Certificate of Amendment to Restated
      Certificate of Incorporation of the Registrant
      (incorporated by reference to Exhibit 2.1 to
      Registrant's Current Report on Form 8-K dated
      December 19, 1994) . . . . . . . . . . . . . . . 

3.7   Bylaws of the Registrant (incorporated herein by
      reference to Exhibit 3.4 to the Registrant's
      Registration Statement No. 33-24396) . . . . . . 

3.8   Amendment to Bylaws of the Registrant, adopted on
      June 18, 1992 (incorporated herein by reference to
      Exhibit 3.6 to the Registrant's Registration
      Statement on Form S-4, filed on December 15, 1992,
      as amended). . . . . . . . . . . . . . . . . . . 

3.9   Contingent Payment Rights Agreement, dated as of
      June 28, 1991, between the Registrant, Vestron
      Acquisition Corp., Vestron Inc. and American Stock
      Transfer & Trust Company, as Rights Agent, and
      Price Waterhouse, as Representative (incorporated
      herein by reference to Exhibit 2.1 to the
      Registrant's Registration Statement on Form 8-A,
      dated July 15, 1991) . . . . . . . . . . . . . . 

4.1   Form of Common Stock Certificate (incorporated
      herein by reference to Exhibit 4 to the
      Registrant's Registration Statement No. 33-24396)
       . . . . . . . . . . . . . . . . . . . . . . . . 

4.2   Rights Agreement, dated as of July 19, 1990,
      between the Registrant and American Stock Transfer
      & Trust Company, which includes as exhibits
      thereto, the form of Right Certificate and the
      Summary of Rights (incorporated herein by
      reference to Exhibit 4a to the Registrant's
      Current Report on Form 8-K, dated August 1, 1990)
       . . . . . . . . . . . . . . . . . . . . . . . . 

4.3   First Amendment to Rights Agreement, dated as of
      May 1, 1992, between the Registrant and American
      Stock Transfer & Trust Company (incorporated
      herein by reference to Exhibit 4 to the
      Registrant's Current Report on Form 8-K, dated May
      1, 1992) . . . . . . . . . . . . . . . . . . . . 

4.4   Form of Indenture between the Registrant and
      American Stock Transfer & Trust Company, as
      trustee, relating to the LIVE Increasing Rate
      Notes (including Note and Pledge Agreement)
      (incorporated herein by reference to Exhibit 35 to
      the Registrant's Schedule 13E-4, filed on December
      15, 1992, as amended). . . . . . . . . . . . . . 

4.5   Form of Supplemental Indenture between the
      Registrant and American Stock Transfer & Trust
      Company, as trustee, relating to the LIVE
      Increasing Rate Notes (incorporated herein by
      reference to Exhibit 4.5 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1994) . . . . . . . . . . . . 

4.6   Form of Certificate of Series B Cumulative
      Convertible Preferred Stock (incorporated herein
      by reference to Exhibit 4.7 to the Registrant's
      Registration Statement on Form S-4, filed on
      December 15, 1992, as amended) . . . . . . . . . 

4.7   Form of Certificate of Series C Convertible
      Preferred Stock (incorporated herein by reference
      to Exhibit 4.8 to the Registrant's Registration
      Statement on Form S-4, filed on December 15, 1992,
      as amended). . . . . . . . . . . . . . . . . . . 

4.8   Indenture, dated as of March 26, 1993, between the
      Registrant and U.S. Trust Company of California,
      N.A., relating to the $37,000,000 of 12% Senior
      Subordinated Secured Notes due 1994 (including
      form of Note) (incorporated herein by reference to
      Exhibit 4.7 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1992). . . . . . . . . . . . . . . . . . . . . . 

4.9   Agreement dated as of December 22, 1993 between
      LIVE Ventures Inc. and U.S. Trust Company of
      California, N.A. (incorporated herein by reference
      to Exhibit 4.8 to the Registrant's Annual Report
      on Form 10-K for the fiscal year ended December
      31, 1993). . . . . . . . . . . . . . . . . . . . 

10.1  Exclusive Distribution Agreement, dated as of
      March 1, 1987, between International Video
      Entertainment Inc. and MCA Distribution
      Corporation (incorporated herein by reference to
      Exhibit 10.33 to Carolco Pictures Inc.'s Annual
      Report on Form 10-K for the fiscal year ended
      December 31, 1986) . . . . . . . . . . . . . . . 

10.2  Amendment, dated as of December 28, 1989, of
      Exclusive Distribution Agreement between
      International Video Entertainment Inc. and MCA
      Distribution Corporation (incorporated herein by
      reference Exhibit 10.12 to the Registrant's Annual
      Report on Form 10-K for the year ended December
      31, 1990). . . . . . . . . . . . . . . . . . . . 

10.3  Amendment, dated as of May 10, 1990, of Exclusive
      Distribution Agreement between International Video
      Entertainment Inc. and MCA Distribution
      Corporation (incorporated herein by reference to
      Exhibit 10.13 to the Registrant's Annual Report of
      Form 10-K for the fiscal year ended December 31,
      1990). . . . . . . . . . . . . . . . . . . . . . 

10.4  License and Distribution Agreement, dated as of
      May 11, 1992, by and between LIVE Home Video Inc.,
      LIVE America Inc., LIVE Distributing Inc., Vestron
      Inc. and WEA Corp. (incorporated herein by
      reference to Exhibit 10.4 to the Registrant's
      Registration Statement on Form S-4, filed on
      December 15, 1992, as amended) . . . . . . . . . 

10.5  Amendment to License and Distribution Agreement,
      dated as of June 8, 1992, by and between LIVE Home
      Video Inc., LIVE America Inc., LIVE Distributing
      Inc., Vestron Inc. International Video Productions
      Inc. and WEA Corp. (incorporated herein by
      reference to Exhibit 10.5 to the Registrant's
      Registration Statement on Form S-4, filed on
      December 15, 1992, as amended) . . . . . . . . . 

10.6  Four-Party Agreement, dated as of May 19, 1992,
      among Uni Distribution Corp. (formerly MCA), LIVE
      Home Video Inc., LIVE America Inc. and WEA Corp.
      (incorporated herein by reference to Exhibit 10.6
      to the Registrant's Registration Statement on Form
      S-4, filed on December 15, 1992, as amended) . . 

10.7  Security Agreement, dated as of June 8, 1992, by
      and between LIVE Home Video Inc., LIVE America
      Inc., International Video Productions Inc. and WEA
      Corp. (incorporated herein by reference to Exhibit
      10.9 to the Registrant's Registration Statement on
      Form S-4, filed on December 15, 1992, as amended)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.8  Amendment, dated April 12, 1990, to Video Rights
      License Agreement, dated July 27, 1987, between
      Carolco Pictures Inc. and International Video
      Entertainment Inc., as amended as of October 15,
      1987 (incorporated herein by reference to Exhibit
      10.45 to the Registrant's Annual Report on Form
      10-K for the fiscal year ended December 31, 1990)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.9  Second Amendment, dated March 6, 1991, to Video
      Rights License Agreement, dated July 27, 1987,
      between Carolco Pictures Inc. and International
      Video Entertainment Inc., as amended on October
      15, 1987 and April 12, 1990 (incorporated herein
      by reference to Exhibit 10.49 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1990) . . . . . . . . . . . . 

10.10 Third Amendment, dated October 21, 1991, to Video
      Rights License Agreement, dated July 27, 1987,
      between Carolco Pictures Inc. and LIVE Home Video
      Inc. (formerly known as International Video
      Entertainment Inc.), as amended on October 15,
      1987, April 12, 1990 and March 6, 1991
      (incorporated herein by reference to Exhibit 10.15
      to the Registrant's Registration Statement on Form
      S-4, filed on December 15, 1992, as amended) . . 

10.11 Fourth Amendment, dated March 2, 1992, to Video
      Rights License Agreement, dated July 27, 1987,
      between Carolco Pictures Inc. and LIVE Home Video
      Inc., as amended on October 15, 1987, April 12,
      1990, March 6, 1991 and October 21, 1991
      (incorporated herein by reference to Exhibit 10.16
      to the Registrant's Registration Statement on Form
      S-4, filed on December 15, 1992, as amended) . . 

10.12 Agreement, dated as of January 1, 1995, between
      Carolco Pictures Inc. and LIVE Film and Mediaworks
      Inc.(incorporated herein by reference to Exhibit
      10.12 to the Registrant's Annual Report on Form
      10-K for the fiscal year ended December 31, 1994)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.13 Memorandum of Agreement, dated as of September 1,
      1991, between LIVE America Inc. and MCA Canada
      Ltd. (incorporated herein by reference to Exhibit
      10.7 to the Registrant's Annual Report on Form 10-
      K for the fiscal year ended December 31, 1991) . 

10.14 Term Extension Letter Agreement, dated December
      16, 1994, among LIVE Film and Mediaworks Inc.,
      LIVE America Inc. and MCA Home Video Canada
      (incorporated herein by reference to Exhibit 10.14
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994) . . . . 

10.15 Laser Videodisc Sublicense Deal Memorandum, dated
      as of October 1, 1991, by and between LIVE America
      Inc. and Pioneer LDCA, Inc. (incorporated herein
      by reference to Exhibit 10.8 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1991) . . . . . . . . . . . . 

10.16 Employment Agreement, dated as of December 23,
      1993, for the services of Roger A. Burlage
      (incorporated herein by reference to Exhibit 10.19
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1993)^. . . . 

10.17 Letter Agreement, dated as of September 29, 1993,
      pertaining to the departure of David A. Mount as
      President and Chief Executive Officer of the
      Registrant (incorporated herein by reference to
      Exhibit 10.22 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1993)^ . . . . . . . . . . . . . . . . . . . . . 

10.18 Letter Agreement, dated as of July 7, 1992,
      pertaining to the Employment Agreement for the
      services of Devendra Mishra (incorporated herein
      by reference to Exhibit 10.20 to the Registrant's
      Registration Statement on Form S-4, filed on
      December 15, 1992, as amended)^. . . . . . . . . 

10.19 Employment Agreement, dated as of February 1,
      1994, for the services of Michael J. White
      (incorporated herein by reference to Exhibit 10.26
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1993)^. . . . 

10.20 Memorandum Agreement dated as of December 23,
      1993, by and between the Registrant and Anthony J.
      Scotti (incorporated herein by reference to
      Exhibit 10.29 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1993)^ . . . . . . . . . . . . . . . . . . . . . 

10.21 Agreement dated as of April 1, 1994 between the
      Registrant and Pioneer North America Inc. with
      respect to the services of Ronald B. Cushey
      (incorporated herein by reference to Exhibit 10.21
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994)^. . . . 

10.22 Employment Agreement, dated as of December 31,
      1994, for the services of Ronald B. Cushey
      (incorporated herein by reference to Exhibit 10.22
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994)^. . . . 

10.23 Employment Agreement, dated as of April 29, 1994,
      for the services of Steve Mangel (incorporated
      herein by reference to Exhibit 10.23 to the
      Registrant's Annual Report on Form 10-K for the
      fiscal year ended December 31, 1994)^. . . . . . 
 
10.24 Employment Agreement, dated as of January 20,
      1994, for the services of Paul S. Almond
      (incorporated herein by reference to Exhibit 10.24
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994)^. . . . 
 
10.25 First Amendment to Employment Agreement, dated as
      of February 2, 1994, for the services of Paul S.
      Almond (incorporated herein by reference to
      Exhibit 10.25 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1994)^ . . . . . . . . . . . . . . . . . . . . . 

10.26 Employment Agreement, dated as of January 31,
      1994, for the services of Elliot Slutzky
      (incorporated herein by reference to Exhibit 10.26
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994)^. . . . 

10.27 Jefferson Capital Group, Ltd. and Bear Stearns &
      Co. Inc. Retainer Letter with the Registrant,
      dated as of May 21, 1992, with Indemnification
      Agreement (incorporated herein by reference to
      Exhibit 27 to the Registrant's Schedule 13E-4,
      filed on December 15, 1992, as amended)^ . . . . 

10.28 Agreement, dated as of July 31, 1992, between
      Jefferson Capital Group, Ltd. and the Registrant
      (incorporated herein by reference to Exhibit 28 to
      the Registrant's Schedule 13E-4, filed on December
      15, 1992, as amended)^ . . . . . . . . . . . . . 

10.29 Agreement, dated as of August 13, 1992, between
      Daniels & Associates and the Registrant
      (incorporated herein by reference to Exhibit 29 to
      the Registrant's Schedule 13E-4, filed on December
      15, 1992, as amended)^ . . . . . . . . . . . . . 

10.30 Agreement, dated as of July 7, 1993, between
      Jefferson Capital Group, Ltd. and Daniels &
      Associates and the Registrant (incorporated herein
      by reference to Exhibit 10.33 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1993)^. . . . . . . . . . . . 

10.31 Consulting Agreement, dated as of July 26, 1993,
      between Roger R. Smith and the Registrant
      (incorporated herein by reference to Exhibit 10.36
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1993)^. . . . 

10.32 Letter of Understanding, dated as of January 26,
      1993, by and between the Registrant and Jefferson
      Capital Group, Ltd. (incorporated herein by
      reference to Exhibit 10.30 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1992)^. . . . . . . . . . . . 

10.33 Asset Purchase Agreement, dated as of October 30,
      1990, between Vestron Acquisition Corp. and
      Vestron Inc., including annexes (incorporated
      herein by reference to Exhibit 10.66 of
      Registrant's Current Report on Form 8-K, dated
      October 30, 1990). . . . . . . . . . . . . . . . 

10.34 Indemnification Agreement, dated as of October 30,
      1990, by and among Vestron Acquisition Corp.,
      Furst Holdings, Inc., Frogtown Holdings Inc.,
      Austin O. Furst, Jr., and Vestron Inc., including
      annex (incorporated herein by reference to Exhibit
      10.67 of Registrant's Current Report on Form 8-K,
      dated October 30, 1990). . . . . . . . . . . . . 

10.35 Securities Indemnification Agreement, dated as of
      October 30, 1990, by and among Vestron Acquisition
      Corp., Furst Holdings, Inc., Frogtown Holdings
      Inc., Austin O. Furst, Jr., and Vestron Inc.,
      including annex (incorporated herein by reference
      to Exhibit 10.68 of Registrant's Current Report on
      Form 8-K, dated October 30, 1990). . . . . . . . 

10.36 New Notes Intercreditor Agreement, dated as of
      March 26, 1993 by and between Chemical Bank, as
      Administrative Agent and as Collateral Agent, and
      U.S. Trust Company of California, N.A.
      (incorporated herein by reference to Exhibit 10.57
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1992) . . . . 

10.37 Addendum to New Notes Intercreditor Agreement,
      dated as of December 22, 1993 by and between
      Chemical Bank, as Administrative Agent and as
      Collateral Agent, and U.S. Trust Company of
      California, N.A. (incorporated herein by reference
      to Exhibit 10.64 to the Registrant's Annual Report
      on Form 10-K for the fiscal year ended December
      31, 1993). . . . . . . . . . . . . . . . . . . . 

10.38 Amended and Restated Trustee Intercreditor
      Agreement, dated as of March 26, 1993 by and among
      Chemical Bank, as Administrative Agent and as
      Collateral Agent, U.S. Trust Company of
      California, N.A. and American Stock Transfer &
      Trust Company (incorporated herein by reference to
      Exhibit 10.58 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1992). . . . . . . . . . . . . . . . . . . . . . 

10.39 Warrant Agreement and Warrant Certificate, dated
      as of November 26, 1990, between the Registrant
      and Jefferson Capital Group, Ltd. (incorporated
      herein by reference to Exhibit 10.44 to the
      Registrant's Annual Report on Form 10-K for the
      fiscal year ended December 31, 1990)^. . . . . . 

10.40 Loan Fund Warrant Agreement, dated as of March 23,
      1993, between the Registrant and the Warrant
      Holders (incorporated herein by reference to
      Exhibit 10.60 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1992). . . . . . . . . . . . . . . . . . . . . . 

10.41 Loan Fund Common Stock Purchase Warrants, dated as
      of March 23, 1993, between the Registrant and
      Jefferson Capital Group, Ltd. (incorporated herein
      by reference to Exhibit 10.61 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1992)^. . . . . . . . . . . . 

10.42 Registration Rights Agreement for Loan Fund Common
      Stock Purchase Warrants, dated as of March 23,
      1993, by and among the Registrant and the holders
      of the Loan Fund Common Stock Purchase Warrants
      (incorporated herein by reference to Exhibit 10.62
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1992) . . . . 

10.43 Class B Warrant Agreement, dated as of March 26,
      1993, between the Registrant and the Class B
      Warrant Holders (incorporated herein by reference
      to Exhibit 10.63 to the Registrant's Annual Report
      on Form 10-K for the fiscal year ended December
      31, 1992). . . . . . . . . . . . . . . . . . . . 

10.44 Class B Common Stock Purchase Warrants, dated as
      of March 29, 1993, between the Registrant and
      Jefferson Capital Group, Ltd. (incorporated herein
      by reference to Exhibit 10.64 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1992)^. . . . . . . . . . . . 

10.45 Class B Common Stock Purchase Warrants, dated as
      of March 29, 1993, between the Registrant and
      Anthony J. Scotti (incorporated herein by
      reference to Exhibit 10.65 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1992)^. . . . . . . . . . . . 

10.46 Registration Rights Agreement for Class B Common
      Stock Purchase Warrants, dated as of March 26,
      1993, by and among the Registrant and the holders
      of the Class B Common Stock Purchase Warrants
      (incorporated herein by reference to Exhibit 10.66
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1992) . . . . 

10.47 1988 Stock Option and Stock Appreciation Rights
      Plan of the Registrant as amended through March 6,
      1995 (incorporated herein by reference to Exhibit
      10.47 to the Registrant's Annual Report on Form
      10-K for the fiscal year ended December 31, 1994)^
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.48 Master Agreement for Home Video Rights to German
      Language Versions, dated as of April 25, 1991, by
      and between LEI-IVE Entertainment N.V. d/b/a/ LIVE
      Entertainment International and Carolco
      International N.V. (incorporated herein by
      reference to Exhibit 10.52 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1991) . . . . . . . . . . . . 

10.49 Short-Form Agreement, dated as of August 15, 1991,
      by and between Carolco Television Inc. and Vestron
      Inc. (incorporated herein by reference to Exhibit
      10.53 to the Registrant's Annual Report on Form
      10-K for the fiscal year ended December 31, 1991)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.50 Short-Form Agreement (International), dated as of
      August 15, 1991, by and between Carolco
      International N.V. and Vestron Inc. (incorporated
      herein by reference to Exhibit 10.54 to the
      Registrant's Annual Report on Form 10-K for the
      fiscal year ended December 31, 1991) . . . . . . 

10.51 Registration Rights Agreement, dated as of July 3,
      1990, by and between the Registrant and Pioneer
      LDCA, Inc. (incorporated herein by reference to
      Exhibit 10.55 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1991). . . . . . . . . . . . . . . . . . . . . . 

10.52 Registration Rights Agreement, dated as of March
      24, 1992, by and between the Registrant and
      Carolco Pictures Inc., Pioneer LDCA, Inc., RCS
      Video Services International B.V., RCS Video
      Services Antilles N.V. and Le Studio Canal+ S.A.
      (incorporated herein by reference to Exhibit 10.56
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1991) . . . . 

10.53 Amendment to Registration Rights Agreement, dated
      as of August 1992, by and between the Registrant
      and Carolco Pictures Inc., Pioneer LDCA, Inc., RCS
      Video Services International B.V., RCS Video
      Services Antilles N.V. and Le Studio Canal+ S.A.
      (incorporated herein by reference to Exhibit 10.68
      to the Registrant's Registration Statement on Form
      S-4, filed on December 15, 1992, as amended) . . 

10.54 Registration Rights Agreement for Common Stock
      dated as of July 20, 1993, by and among the
      Registrant, Carolco Pictures Inc., Pioneer LDCA,
      Inc., RCS Video Services International B.V., RCS
      Video Services Antilles N.V., and Le Studio Canal+
      S.A. (incorporated herein by reference to Exhibit
      10.84 to the Registrant's Annual Report on Form
      10-K for the fiscal year ended December 31, 1993)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.55 Reconciliation and Offset Agreement, dated as of
      December 31, 1992, by and between Carolco Pictures
      Inc., Carolco International N.V., the Registrant,
      LIVE Home Video Inc. and LEI-IVE Entertainment
      N.V. (incorporated herein by reference to Exhibit
      10.85 to the Registrant's Annual Report on Form
      10-K for the fiscal year ended December 31, 1993)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.56 Compromise Settlement Agreement and Release dated
      as of December 31, 1994, between the Registrant
      and Carolco Pictures Inc. (incorporated herein by
      reference to Exhibit 10.56 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1994) . . . . . . . . . . . . 

10.57 Registration Rights Agreement for Series C
      Convertible Preferred Stock, dated as of September
      14, 1992, by and among the Registrant and Pioneer
      LDCA, Inc. (incorporated herein by reference to
      Exhibit 17 to the Registrant's Schedule 13E-4,
      filed on December 15, 1992, as amended). . . . . 

10.58 Fiscal 1993 Incentive Cash Compensation Program
      for the Registrant, dated July 1993 (incorporated
      herein by reference to Exhibit 10.103 to the
      Registrant's Annual Report on Form 10-K for the
      fiscal year ended December 31, 1993)^. . . . . . 

10.59 Fiscal 1994 Incentive Cash Compensation Program
      for the Registrant and LIVE Home Video Inc., dated
      February 1994 (incorporated herein by reference to
      Exhibit 10.104 to the Registrant's Annual Report
      on Form 10-K for the fiscal year ended December
      31, 1993)^ . . . . . . . . . . . . . . . . . . . 

10.60 Fiscal 1994 Incentive Cash Compensation Program
      for the LIVE Specialty Retail Division, dated
      February 1994 (incorporated herein by reference to
      Exhibit 10.105 to the Registrant's Annual Report
      on Form 10-K for the fiscal year ended December
      31, 1993)^ . . . . . . . . . . . . . . . . . . . 

10.61 Fiscal 1995 Incentive Cash Compensation Program
      for the Registrant, dated March 6, 1995
      (incorporated herein by reference to Exhibit 10.61
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994)^. . . . 

10.62 Securities Exchange Agreement, dated as of March
      26, 1993, by and between the Registrant, LIVE Home
      Video Inc., LIVE America Inc., LEI-IVE
      Entertainment N.V., International Video
      Productions, Inc., Vestron Inc., Daniels &
      Associates and Jefferson Capital Group, Ltd.
      (incorporated herein by reference to Exhibit 10.96
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1992) . . . . 

10.63 Form of Securities Purchase Agreement, dated as of
      March 26, 1993, by and between the Registrant,
      LIVE Home Video Inc., LIVE America Inc., LEI-IVE
      Entertainment N.V., International Video
      Productions, Inc., Vestron Inc. and various
      purchasers (incorporated herein by reference to
      Exhibit 10.97 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1992). . . . . . . . . . . . . . . . . . . . . . 

10.64 Agreement, dated as of October 11, 1994, between
      Jefferson Capital Group, Ltd. and the Registrant
      (incorporated herein by reference to Exhibit 10.64
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994)^. . . . 

10.65 Agreement, dated as of August 1, 1994, among LEI-
      IVE Entertainment N.V., International Video
      Productions Inc., Atrium Productions Kft. and
      Beleggingsmaatschappijmaasmond II B.V.
      (incorporated herein by reference to Exhibit 10.65
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994)^. . . . 

10.66 Amended and Restated Loan and Security Agreement
      dated as of November 14, 1994 among Foothill
      Capital Corporation, and each of LIVE Home Video
      Inc., LIVE Film and Mediaworks Inc., LIVE
      Entertainment International Inc., LIVE America
      Inc. and Vestron Inc. (without schedules or
      exhibits) (incorporated herein by reference to
      Exhibit 10.66 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1994). . . . . . . . . . . . . . . . . . . . . . 

10.67 Continuing Guaranty dated as of November 14, 1994
      from the Registrant in favor of Foothill Capital
      Corporation (incorporated herein by reference to
      Exhibit 10.67 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1994). . . . . . . . . . . . . . . . . . . . . . 

10.68 Assignment of Liens and Loan Documents effective
      as of November 14, 1994, among, Chemical Bank,
      Foothill Capital Corporation, and each of the
      Registrant, LIVE Home Video Inc., LIVE Film and
      Mediaworks Inc., LIVE Entertainment International
      Inc., LIVE America Inc., LIVE Ventures Inc. and
      Vestron Inc. (incorporated herein by reference to
      Exhibit 10.68 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1994). . . . . . . . . . . . . . . . . . . . . . 

10.69 Notice of Assignment, dated November 14, 1994,
      from Chemical Bank to WEA Corp. (incorporated
      herein by reference to Exhibit 10.69 to the
      Registrant's Annual Report on Form 10-K for the
      fiscal year ended December 31, 1994) . . . . . . 

10.70 Notice of Assignment and Irrevocable Authority,
      dated November 16, 1994, from LIVE Home Video
      Inc., LIVE America Inc., LIVE Film and Mediaworks
      Inc. (formerly known as International Video
      Productions Inc.) and Vestron Inc. to WEA Corp.
      (incorporated herein by reference to Exhibit 10.70
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994) . . . . 

10.71 Notice of Inventory Access Rights, dated November
      16, 1994, from LIVE Home Video Inc., LIVE America
      Inc., LIVE Film and Mediaworks Inc. (formerly
      known as International Video Productions Inc.) and
      Vestron Inc. to WEA Corp. (incorporated herein by
      reference to Exhibit 10.71 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1994) . . . . . . . . . . . . 

10.72 Intercreditor Agreement, dated as of November 16,
      1994, by and between Foothill Capital Corporation
      and WEA Corp. (incorporated herein by reference to
      Exhibit 10.72 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1994). . . . . . . . . . . . . . . . . . . . . . 

10.73 Trustee Intercreditor Agreement, dated as of
      November 16, 1994, by and between Foothill Capital
      Corporation and American Stock Transfer & Trust
      Company (incorporated herein by reference to
      Exhibit 10.73 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1994). . . . . . . . . . . . . . . . . . . . . . 

10.74 Agreement dated April 8, 1992 between the
      Registrant and Carolco Pictures Inc. with respect
      to the division of legal fees and costs
      (incorporated herein by reference to Exhibit 10.74
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1994) . . . . 

10.75 Tax Agreement dated as of August 31, 1994 among
      the Registrant, Strawberries Inc., Strawberries
      Investments Inc., Waxie Maxie Quality Music Co.
      and Strawberries Holding, Inc. (incorporated by
      reference to Exhibit 10.1 to Registrant's Current
      Report on Form 8-K dated September 15, 1994) . . 

10.76 Heads of Agreement, dated February 15, 1995, among
      the Registrant, LIVE Home Video, Inc., LIVE
      Entertainment International Inc., VCL/Carolco
      Communications B.V., VCL/Carolco Communications
      GmbH, Apricot Computer GmbH and Gunther Detlef
      Ruth (incorporated herein by reference to Exhibit
      10.76 to the Registrant's Annual Report on Form
      10-K for the fiscal year ended December 31, 1994)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.77 Short Form Deal Memo dated as of June 21, 1994
      between International Video Productions Inc. and
      Le Studio Canal+(U.S.) (incorporated herein by
      reference to Exhibit 10.77 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1994) . . . . . . . . . . . . 

10.78 First Amendment to Employment Agreement, dated as
      of April 1, 1995, for the services of Michael J.
      White (incorporated herein by reference to Exhibit
      10.1 to the Registrant's Quarterly Report on Form
      10-Q for the quarter ended March 31, 1995)^. . . 

10.79 Amendment No. One to Amended and Restated Loan and
      Security Agreement, dated as of February 28, 1995
      among Foothill Capital Corporation, and each of
      LIVE Home Video Inc., LIVE Film and Mediaworks
      Inc., LIVE Entertainment International Inc., LIVE
      America Inc. and Vestron Inc. (incorporated herein
      by reference to Exhibit 10.2 to the Registrant's
      Quarterly Report on Form 10-Q for the quarter
      ended March 31, 1995). . . . . . . . . . . . . . 

10.80 Fourth Amendment to License and Distribution
      Agreement dated as of May 27, 1995 between LIVE
      Home Video Inc., LIVE America Inc., Vestron Inc.,
      and LIVE Film and Mediaworks Inc. and Warner-
      Electra-Atlantic Corporation (incorporated herein
      by reference to Exhibit 10.80 to the Registrant's
      Quarterly Report on Form 10-Q for the quarter
      ended June 30, 1995) . . . . . . . . . . . . . . 

10.81 Amended and Restated Intercreditor Agreement dated
      as of May 27, 1995 between Foothill Capital
      Corporation and Warner-Elektra-Atlantic
      Corporation (incorporated herein by reference to
      Exhibit 10.81 to the Registrant's Quarterly Report
      on Form 10-Q for the quarter ended June 30, 1995)
       . . . . . . . . . . . . . . . . . . . . . . . . 

10.82 New Security Agreement dated as of May 27, 1995
      between LIVE Home Video Inc., LIVE America Inc.,
      Vestron Inc., LIVE Film and Mediaworks Inc., and
      Warner-Elektra-Atlantic Corporation (incorporated
      herein by reference to Exhibit 10.82 to the
      Registrant's Quarterly Report on Form 10-Q for the
      quarter ended June 30, 1995) . . . . . . . . . . 

10.83 Amendment to Employment Agreement, dated as of
      December 31, 1995 for the services of Ronald B.
      Cushey (incorporated herein by reference to
      Exhibit 10.83 to the Registrant's Annual Report on
      Form 10-K for the fiscal year ended December 31,
      1995)^ . . . . . . . . . . . . . . . . . . . . . 

10.84 Termination of Engagement Letter, dated May 31,
      1995 between Jefferson Capital Group, Ltd. and
      Daniels & Associates and the Registrant
      (incorporated herein by reference to Exhibit 10.84
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1995)^. . . . 

10.85 1988 Stock Option and Stock Appreciation Rights
      Plan of the Registrant as amended through February
      7, 1996 (incorporated by reference to Appendix B
      to the Registrant's proxy statement for the 1996
      Annual Meeting of Stockholders)^ . . . . . . . . 

10.86 Fiscal 1996 Incentive Cash Compensation Program
      for the Registrant, dated February 7, 1996
      (incorporated herein by reference to Exhibit 10.86
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1995)^. . . . 

10.87 Multiple Picture Deal Agreement, dated as of
      February 14, 1996, between Orion Pictures
      Corporation and the Registrant (incorporated
      herein by reference to Exhibit 10.87 to the
      Registrant's Annual Report on Form 10-K for the
      fiscal year ended December 31, 1995) . . . . . . 

10.88 Laser Videodisc Sublicense Deal Memorandum, dated
      as of October 1, 1995, by and between Pioneer
      Entertainment (USA) L.P. and LIVE Film and
      Mediaworks Inc. (incorporated herein by reference
      to Exhibit 10.88 to the Registrant's Annual Report
      on Form 10-K for the fiscal year ended December
      31, 1995). . . . . . . . . . . . . . . . . . . . 

10.89 Sale and Purchase Agreement, dated November 6,
      1995, among LIVE Entertainment International Inc.,
      VCL/Carolco Communications B.V., VCL/Carolco
      Communications GmbH, Apricot Computer GmbH and
      Gunther Detlef Ruth (incorporated herein by
      reference to Exhibit 10.89 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1995) . . . . . . . . . . . . 

10.90 Supplement to the Sale and Purchase Agreement,
      dated November 6, 1995, between LIVE Entertainment
      International Inc. and Apricot Computer GmbH
      (incorporated herein by reference to Exhibit 10.90
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1995) . . . . 

10.91 Output Deal Memo, dated as of February 8, 1996
      between LIVE International and Pioneer LDC, Inc.
      (incorporated herein by reference to Exhibit 10.91
      to the Registrant's Annual Report on Form 10-K for
      the fiscal year ended December 31, 1995) . . . . 

10.92 Amendment No. Two to Amended and Restated Loan and
      Security Agreement, dated as of July 18, 1995
      among Foothill Capital Corporation, and each of
      LIVE Home Video Inc., LIVE Film and Mediaworks
      Inc., LIVE Entertainment International Inc., LIVE
      America Inc. and Vestron Inc. (incorporated herein
      by reference to Exhibit 10.92 to the Registrant's
      Annual Report on Form 10-K for the fiscal year
      ended December 31, 1995) . . . . . . . . . . . . 

10.93 Employment Agreement, dated as of August 15, 1996,
      for the services of Ronald B. Cushey (incorporated
      herein by reference to Exhibit 10.93 to the
      Registrant's Quarterly Report on Form 10-Q for the
      quarter ended September 30, 1996)^ . . . . . . . 

10.94 Employment Agreement, dated as of August 15, 1996,
      for the services of Paul S. Almond  (incorporated
      herein by reference to Exhibit 10.94 to the
      Registrant's Quarterly Report on Form 10-Q for the
      quarter ended September 30, 1996)^ . . . . . . . 

10.95 Employment Agreement, dated as of August 15, 1996,
      for the services of Elliot Slutzky  (incorporated
      herein by reference to Exhibit 10.95 to the
      Registrant's Quarterly Report on Form 10-Q for the
      quarter ended September 30, 1996)^ . . . . . . . 

10.96 Fifth Amendment to License and Distribution
      Agreement dated as of May 7, 1996 between LIVE
      Film and Mediaworks Inc. (formerly LIVE Home Video
      Inc. and successor in interest to LIVE Film and
      Mediaworks Inc., a California corporation), LIVE
      America Inc. and Vestron Inc. and Warner-Elektra-
      Atlantic Corporation.  (incorporated herein by
      reference to Exhibit 10.96 to the Registrant's
      Quarterly Report on Form 10-Q for the quarter
      ended September 30, 1996)^ . . . . . . . . . . . 

10.97 Agreement dated March 14, 1996 between Carreden
      Group Inc. and LIVE Entertainment Inc.
      (Incorporated herein by reference to Exhibit 13 to
      the Registrant's Schedule 13E-4 filed on August
      21, 1996) (incorporated herein by reference to
      Exhibit 10.97 to the Registrant's Quarterly Report
      on Form 10-Q for the quarter ended September 30,
      1996)^ . . . . . . . . . . . . . . . . . . . . . 

10.98 Employment Agreement Deal Memo, dated as of
      September 12, 1996, for the services of Ann
      Dubinet (incorporated herein by reference to
      Exhibit 10.98 to the Registrant's Quarterly Report
      on Form 10-Q for the quarter ended September 30,
      1996)^ . . . . . . . . . . . . . . . . . . . . . 

10.99 Employment Agreement, dated as of January 1, 1997
      for the services of Roger A. Burlage^*

11    Computation of Earnings Per Share* . . . . . . . 

21    Subsidiaries of the Company* . . . . . . . . . . 

23    Consent of Independent Auditors* . . . . . . . . 

24    Powers of Attorney and Board of Directors
      resolution authorizing the same* . . . . . . . . . . . 

27    Financial Data Schedule (Electronic Filing Only)*
       . . . . . . . . . . . . . . . . . . . . . . . . 

99.1  Letter dated August 30, 1994 from Chemical
      Securities Inc. to the Board of Directors of the
      Registrant (incorporated by reference to Exhibit
      99.1 to Registrant's Current Report on Form 8-K
      dated September 15, 1994). . . . . . . . . . . . 
                    

*Filed Herewith
^Management contract or compensatory plan or arrangement
 required to be filed pursuant to Item 14(c)