<PAGE>

                     SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q


[  X  ]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934


                     FOR THE PERIOD ENDED MARCH 31, 1997


Commission File Number 0-22334


                     LODGENET ENTERTAINMENT CORPORATION
                (Exact name of registrant as specified in its charter)


               DELAWARE                             46-0371161
     (State or other jurisdiction of             (I.R.S. Employer
     incorporation or organization)           Identification Number  )


      808 WEST AVENUE NORTH, SIOUX FALLS, SOUTH DAKOTA  57104
      (Address of Principal Executive  Offices)        (ZIP code)


                               (605) 330-1330
                      (Registrant's telephone number,
                            including area code)


                              (not applicable)

                      (Former name, former address and
            former fiscal year, if changed since last report)



     Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities  Exchange Act 
of 1934 during the preceding 12 months (or for such shorter 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 _____.

     At May 5, 1997, there were 11,213,437 shares outstanding of the 
Registrant's common stock, $0.01 par value. 


THIS REPORT CONTAINS A TOTAL OF 16 PAGES, EXCLUDING EXHIBITS. THE EXHIBIT 
INDEX APPEARS ON PAGE 15.
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


                      LODGENET ENTERTAINMENT CORPORATION

                                   FORM 10-Q
                                     INDEX
                                                                 Page
                                                                  No.
PART I.  FINANCIAL INFORMATION

Item 1 -- Financial Statements:
     Consolidated Balance Sheets as of  December 31, 1996 and 
       March 31, 1997 (Unaudited). . . . . . . . . . . . . . . .    3
     Consolidated Statements of Operations (Unaudited) for
       the Three Months Ended March 31, 1996 and 1997. . . . . .    4
     Consolidated Statements of Cash Flows (Unaudited) for
       the Three Months Ended March 31, 1996 and 1997. . . . . .    5
     Notes to Consolidated Financial Statements. . . . . . . . .    6
Item 2 -- Management's Discussion and Analysis of the Results 
            of Operations. . . . . . . . . . . . . . . . . . . .    8


PART II.  OTHER INFORMATION

Item 1 -- Legal Proceedings. . . . . . . . . . . . . . . . . . .   15
Item 2 -- Changes in Securities. . . . . . . . . . . . . . . . .   15
Item 3 -- Defaults Upon Senior Securities. . . . . . . . . . . .   15
Item 4 -- Submission of Matters to a Vote of Security Holders. .   15
Item 5 -- Other Information. . . . . . . . . . . . . . . . . . .   15
Item 6 -- Exhibits and Reports on Form 8-K.. . . . . . . . . . .   15

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . .   16


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS -- CERTAIN STATEMENTS IN 
THIS QUARTERLY REPORT ON FORM 10-Q CONSTITUTE "FORWARD-LOOKING STATEMENTS" 
WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE 
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.  WHEN USED IN THIS QUARTERLY 
REPORT, THE WORDS "EXPECTS," "ANTICIPATES," "ESTIMATES," "BELIEVES," "NO 
ASSURANCE," AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH 
FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND 
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS, WHICH MAY CAUSE THE COMPANY'S 
ACTUAL PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE 
RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH 
FORWARD-LOOKING STATEMENTS.  IN ADDITION TO THE RISKS AND UNCERTAINTIES 
DISCUSSED IN THIS QUARTERLY REPORT, SUCH FACTORS INCLUDE, AMONG OTHERS, THE 
FOLLOWING:  THE IMPACT OF COMPETITION AND CHANGES TO THE COMPETITIVE 
ENVIRONMENT FOR THE COMPANY'S PRODUCTS AND SERVICES, CHANGES IN TECHNOLOGY, 
RELIANCE ON STRATEGIC PARTNERS, UNCERTAINTY OF LITIGATION, CHANGES IN 
GOVERNMENT REGULATION AND OTHER FACTORS DETAILED,  FROM TIME TO TIME, IN THE 
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.  THESE 
FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS QUARTERLY 
REPORT.  THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO 
RELEASE PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS 
CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH 
REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH 
ANY SUCH STATEMENT IS BASED.

--------

     As used herein (unless the context otherwise requires) "LodgeNet", "the 
Company" and/or "the Registrant" means LodgeNet Entertainment Corporation and 
its majority-owned subsidiaries. 


March 31, 1997                                                           Page 2
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


                      PART I -- FINANCIAL INFORMATION
                                       
                    LODGENET ENTERTAINMENT CORPORATION
                        CONSOLIDATED BALANCE SHEETS
                       (Dollar amounts in thousands)

                                                      December 31,    March 31,
                                                         1996           1997
                                                      ------------   -----------
                                                                     (Unaudited)
                     Assets
Current assets:
   Cash and cash equivalents                            $ 86,177      $ 60,416
   Accounts receivable, net of allowance for 
      doubtful accounts                                   18,428        21,113
   Prepaid expenses and other                              1,935         2,488
                                                        --------      --------
      Total current assets                               106,540        84,017

Property and equipment, net                              164,157       178,537
Debt issuance costs, net of accumulated depreciation       8,509         8,459
Other assets, net                                            562         3,908
                                                        --------      --------
                                                        $279,768      $274,921
                                                        --------      --------
                                                        --------      --------
       Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                                     $ 16,775      $ 15,326
   Current portion of long-term debt                         425           486
   Accrued expenses                                        4,596         7,591
                                                        --------      --------
                                                          21,796        23,403
Deferred revenue                                           2,956         3,078
Long-term debt                                           179,233       179,304
Minority interest in consolidated subsidiary                 231           198
                                                        --------      --------
   Total liabilities                                     204,216       205,983
                                                        --------      --------
Stockholders' equity:
   Common stock, $0.01 par value, 20 million shares 
     authorized; 11,125,369 shares outstanding at 
     December 31, 1996 and 11,213,437 shares outstanding 
     at March 31, 1997                                       111           111
   Additional paid-in capital                            120,539       120,625
   Accumulated deficit                                   (45,098)      (51,798)
                                                        --------      --------
      Total stockholders' equity                          75,552        68,938
                                                        --------      --------
                                                        $279,768      $274,921
                                                        --------      --------
                                                        --------      --------


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


March 31, 1997                                                           Page 3
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


                      LODGENET ENTERTAINMENT CORPORATION
              CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
           (Dollar amounts, except per share amounts, in thousands)

                                                     Three Months Ended
                                                         March 31,
                                                   ---------------------
                                                      1996       1997
                                                   ---------  ----------
Revenue:
   Guest Pay                                       $  17,582   $  25,567
   Free-to-guest                                       2,145       2,166
   Other                                                 641       1,923
                                                   ---------  ----------
      Total revenue                                   20,368      29,656
                                                   ---------  ----------
Direct costs:
   Guest Pay                                           6,839       9,726
   Free-to-guest                                       1,684       1,735
   Other                                                 591       1,356
                                                   ---------  ----------
      Total direct costs                               9,114      12,817
                                                   ---------  ----------
Gross profit                                          11,254      16,839
                                                   ---------  ----------
Operating expenses:
   Guest Pay operations                                3,163       4,693
   Selling, general and administrative                 2,849       5,056
   Depreciation and amortization                       6,173       9,695
                                                   ---------  ----------
      Total operating expenses                        12,185      19,444
                                                   ---------  ----------
Operating loss                                          (931)     (2,605)

Interest expense, net                                  1,922       4,064
                                                   ---------  ----------
Loss before income taxes                              (2,853)     (6,669)
Provision for income taxes                                20          10
                                                   ---------  ----------
Net loss                                           $  (2,873)  $  (6,679)
                                                   ---------  ----------
                                                   ---------  ----------
Per common share:
   Net loss attributable to common stock           $   (0.39)  $   (0.59)
                                                   ---------  ----------
                                                   ---------  ----------
Weighted average shares outstanding                7,406,719  11,264,587
                                                   ---------  ----------
                                                   ---------  ----------


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


March 31, 1997                                                           Page 4
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


                       LODGENET ENTERTAINMENT CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                         (Dollar amounts in thousands)

                                                         Three Months Ended
                                                              March 31,
                                                       ----------------------
                                                         1996          1997
                                                       --------      --------
Operating activities:
   Net loss                                            $ (2,873)     $ (6,679)
   Adjustments to reconcile net loss to net cash 
     provided by operating activities:
      Depreciation and amortization                       6,073         9,695
      Minority interest                                     -             (33)
      Change in current assets and liabilities:
         Accounts receivable                             (2,715)       (2,633)
         Prepaid expenses and other                      (1,219)         (553)
         Accounts payable                                 2,224        (1,574)
         Accrued expenses and deferred revenue             (322)        3,117
         Other                                              -            (432)
                                                       --------      --------
Net cash provided by operating activities                 1,168           908
                                                       --------      --------
Investing activities:
   Property and equipment additions                     (18,065)      (22,305)
   Purchase of Cable TV operation                           -          (4,562)
                                                       --------      --------
                                                        (18,065)      (26,867)
                                                       --------      --------
Financing activities:
   Proceeds from long-term debt                             378           238
   Debt issuance costs                                   (1,069)          -
   Repayments of long-term debt                             (55)         (106)
   Borrowings under revolving credit facility            15,358           -
   Stock option activity                                     28            86
                                                       --------      --------
Net cash provided by financing activities                14,640           218
                                                       --------      --------
Effect of exchange rates on cash                             19           (20)
                                                       --------      --------
Increase (decrease) in cash and cash equivalents         (2,238)      (25,761)

Cash and equivalents at beginning of period               4,302        86,177

Cash and equivalents at end of period                  $  2,064      $ 60,416
                                                       --------      --------
                                                       --------      --------
Supplemental cash flow information:
   Cash paid for interest                              $    753      $  1,076
                                                       --------      --------
                                                       --------      --------

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


March 31, 1997                                                           Page 5
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


                      LODGENET ENTERTAINMENT CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 -- Basis of Presentation

     The  accompanying consolidated financial statements as of March 31, 
1997, and for the three month periods ended March 31, 1996 and 1997, have 
been prepared by LodgeNet Entertainment Corporation (the "Company"), without 
audit, pursuant to the rules and regulations of the Securities and  Exchange 
Commission (the "Commission").  The information furnished in the accompanying 
consolidated financial statements reflects all adjustments, consisting only 
of normal recurring adjustments, which, in the opinion of management, are 
necessary for a fair presentation of such financial statements.

     Certain information and footnote disclosures, normally included in 
financial statements prepared in accordance with generally accepted 
accounting principles, have been condensed or omitted pursuant to the rules 
and regulations of the Commission.   Although the Company believes that the 
disclosures are adequate to make the information presented herein not 
misleading, it is recommended that these unaudited consolidated financial 
statements be read in conjunction with the more detailed information 
contained in the Company's Annual Report on Form 10-K for 1996, as filed with 
the Commission.  The results of operations for the three month period ended 
March 31, 1997 are not necessarily indicative of the results of operations 
for the full year.

     The consolidated financial statements  include the accounts  of LodgeNet 
Entertainment Corporation and its majority-owned subsidiaries.  All 
significant inter-company accounts and transactions have been eliminated in 
consolidation.

Note 2 -- Property and Equipment, Net

     Property and equipment was comprised as follows at (in thousands of
dollars):

                                           December 31,    March 31,
                                               1996           1997
                                            ---------      ---------
     Land, building and equipment           $  15,914      $  17,416
     Free-to-guest equipment                    7,369          8,171
     Cable television equipment                 5,291          7,015
     Guest Pay systems:
       Installed                              173,607        185,155
       System components                       23,290         26,760
       Software costs                           6,266          6,830
     Building construction in progress          2,528          5,189
                                            ---------      ---------
                                              234,265        256,536
     Less-depreciation and amortization       (70,108)       (77,999)
                                            ---------      ---------
     Property and equipment, net            $ 164,157      $ 178,537
                                            ---------      ---------
                                            ---------      ---------

Note 3 -- Net Loss Per Common Share

     The net loss per common share was computed using the weighted average
number of shares outstanding and, where applicable, outstanding warrants and
options.


March 31, 1997                                                           Page 6
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


Note 4 -- Effect of Recently Issued Accounting Pronouncements

     During March 1997, the Financial Accounting Standards Board released 
Statement of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings 
per Share", which requires the disclosure of basic earnings per share and 
diluted earnings per share.  The Company will adopt SFAS 128 at the end of 
1997 and anticipates that it will have no effect on previously reported 
earnings per share.

Note 5 -- Reclassifications

     Certain amounts have been reclassified to conform to the 1997 
presentation. Such reclassifications had no effect on previously reported 
results of operations or stockholders' equity. 




March 31, 1997                                                           Page 7
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q

                                       
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   OVERVIEW

LODGING INDUSTRY SERVICES

     Guest Pay Services -- The growth that the Company has experienced has 
principally resulted from its rapid expansion of guest pay-per-view services, 
which the Company began installing in 1986.  In May 1992, the Company 
introduced and began installing its on-demand Guest Pay service.  It has been 
the Company's experience that rooms featuring the "on-demand" Guest Pay 
service generate significantly more revenue and gross profit per room than 
comparable rooms having only the scheduled format.

     The Company's Guest Pay revenues depend on a number of factors, 
including the number of rooms equipped with the Company's systems, Guest Pay 
buy rates, hotel occupancy rates, the popularity, selection and pricing of 
the Company's program offerings and the length of time programming is 
available to the Company prior to its release to the home video and cable 
television markets.  The primary costs of providing Guest Pay services are 
(i) license fees paid to studios for non-exclusive distribution rights to 
recently-released major motion pictures, (ii) nominal one-time license fees 
paid for independent films, which are duplicated by the Company for 
distribution to its operating sites, (iii) license fees for video games and 
other services and (iv) the commission retained by the hotel.  Guest Pay 
operating expenses include costs of system maintenance and support, in-room 
marketing, video tape duplication and distribution, data retrieval, insurance 
and personal property taxes.

     The Company also provides video games and interactive multimedia 
entertainment and information services through its Guest Pay systems.  
Services include folio review, video check-out, in-room printers and guest 
satisfaction surveys. In 1993 the Company entered into a seven-year 
non-exclusive license agreement with Nintendo of America to provide hotels 
with a network-based Super Nintendo-Registered Trademark- video game playing 
system.

     Free-to-guest Services --  In addition to Guest Pay services, the 
Company provides cable television programming for which the hotel, rather 
than its guests, pays the charges.  Free-to-guest services include the 
satellite delivery of various programming channels through a satellite earth 
station, which generally is owned or leased by the hotel.  For free-to-guest 
services the hotel pays the Company a fixed monthly charge per room for each 
programming channel provided.  The Company obtains its free-to-guest 
programming pursuant to multi-year agreements and pays a fixed monthly fee 
per room.  Such fixed monthly fees vary from time to time, depending on 
incentive programs that may be provided by the programming networks. 




March 31, 1997                                                           Page 8
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


Installed Room Base

     During the three months ended March 31, 1997, the Company installed 
32,451 new Guest Pay rooms, equipped 36,133 rooms with its Nintendo game 
system, and installed 5,722 free-to-guest rooms. From March 31, 1996 through 
March 31, 1997, the Company has installed 132,480 new Guest Pay rooms, 
equipped 158,648 rooms with its Nintendo game system, and installed 38,609 
free-to-guest rooms; representing increases of 44.1%, 79.2% and 14.7%, 
respectively, in its installed room bases.  The Company's base of installed 
rooms was comprised as follows at March 31:

                                          1996               1997
                                   ----------------   ----------------
                                    Rooms      %       Rooms      %
                                   -------   ------   -------   ------
     Guest Pay rooms:
       Scheduled                    56,353    18.8%    38,182     8.8%
       On-demand                   243,863    81.2%   394,514    91.2%
                                   -------   ------   -------   ------
                                   300,216   100.0%   432,696   100.0%
                                   -------   ------   -------   ------
                                   -------   ------   -------   ------
     Nintendo game system rooms    200,388            359,036
                                   -------            -------
                                   -------            -------
     Free-to-guest rooms           261,995            300,604
                                   -------            -------
                                   -------            -------


RESIDENTIAL INDUSTRY SERVICES

     In January 1996, the Company formed ResNet Communications, Inc.  
("ResNet") for the purpose of extending the Company's proprietary B-LAN-SM- 
system architecture and operational expertise into the multi-family 
residential unit ("MDU") market.  In October 1996, TCI Satellite, an 
affiliate of TCI, agreed to invest up to $40 million in ResNet in exchange 
for up to a 36.99% interest in ResNet and agreed to provide ResNet with 
long-term access to DBS signals for the MDU market on a nationwide basis.  
The Company believes that the MDU business has financial and technological 
requirements similar to those of the Company's lodging industry business.  
ResNet began installations of its first systems during the quarter ended 
September 30, 1996.  During the quarter ended March 31, 1997, ResNet 
purchased, for approximately $4.6 million, the assets and contracts of a 
private cable television operation with approximately 11,000 passings in the 
Detroit metropolitan area.  The results of ResNet's operations during the 
three months ended March 31, 1997 were not material to the Company's 
consolidated results of operations.


                            RESULTS OF OPERATIONS
                  THREE MONTHS ENDED MARCH 31, 1996 AND 1997

REVENUE ANALYSIS

     The Company's total revenue for the first quarter of 1997 increased 
45.6%, or $9.3 million, in comparison to the first quarter of 1996.  The 
following table sets forth the components of the Company's revenue for the 
quarter ending March 31 (dollar amounts in thousands):

                             1996                  1997
                     --------------------- ---------------------
                                Percent of            Percent of
                                  Total                 Total
                       Amount   Revenues     Amount    Revenues
                     ---------   ------    ---------    ------
     Guest Pay       $  17,582    86.3%    $  25,567     86.2%
     Free-to-guest       2,145    10.5%        2,166      7.3%
     Other                 641     3.2%        1,923      6.5%
                     ---------   ------    ---------    ------
     Total revenue   $  20,368   100.0%    $  29,656    100.0%
                     ---------   ------    ---------    ------
                     ---------   ------    ---------    ------


March 31, 1997                                                           Page 9
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q

     Guest Pay Revenue -- Guest Pay revenues increased 45.4%, or $8.0 
million, in the first quarter of 1997 in comparison to the same quarter of 
1996.  This increase was primarily the result of a 47.4% increase in the 
average number of installed Guest Pay rooms, which offset a slight decline in 
average monthly revenue per room.  The following table sets forth information 
in regard to average monthly revenue per installed Guest Pay room for the 
quarter ending March 31:

                                             1996       1997
                                             ----       ----
     Average monthly revenue per room:
       Movie revenue                      $  18.50    $  17.64
       Video game/information service         2.45        3.04
                                          --------    --------
          Total per Guest Pay room        $  20.95    $  20.68
                                          --------    --------
                                          --------    --------

     Average movie revenue per room, for all Guest Pay rooms, was impacted by 
lower average buy rates and lower hotel occupancy rates, and partially offset 
by the effect of higher average movie prices. The comparative decrease in buy 
rates is attributed to a relatively less popular selection of newly-released 
major motion pictures in the current quarter as compared to the year earlier 
period. The slight increase in average movie price is due to price increases 
in certain Guest Pay rooms; the Company's movie prices are generally $7.95 or 
$8.95.  

     Average video game and information service revenue per room increased 
primarily as a result of the increase in the average number of rooms with 
video game services installed.  On a per-room basis, average monthly video 
game revenues were $2.14 and $1.86 during the quarters ended March 31, 1997 
and 1996, respectively.  The Company had installed its video game service in 
359,036 and 200,388 Guest Pay rooms as of March 31, 1997 and 1996, 
respectively.

     Free-to-guest Revenue -- Free-to-guest revenues increased 1.0%, or 
$21,000, in the first quarter of 1997 as compared to the same quarter of 
1996.  The comparative increase in revenues resulted from the 14.7% increase 
in the number of installed free-to-guest rooms since March 31, 1996, which 
offset lower average revenue per room.  The Company had 300,604 and 261,995 
free-to-guest rooms installed at March 31, 1997 and 1996, respectively. 

     Other Revenue -- Revenue from other sources, such as the sale of 
televisions, system equipment, service parts and labor, and miscellaneous 
free-to-guest programming materials, increased by $1.3 million or 200%, in 
the first quarter of 1997 as compared to the same quarter of 1996.  The 
increase was primarily attributable to increased sales of system equipment, 
increased service-related revenues and increased television sales.

Expense Analysis

     Direct Costs -- The following table sets forth information in regard to 
the Company's direct costs and gross profit margin for the quarter ending 
March 31 (dollar amounts in thousands):

                                            1996        1997
                                          --------    --------
     Direct costs:
       Guest Pay                          $  6,839    $  9,726
       Free-to-guest                         1,684       1,735
       Other revenue                           591       1,356
                                          --------    --------
     Total direct costs                   $  9,114    $ 12,817
                                          --------    --------
                                          --------    --------
     Gross profit margin:
       Guest Pay                              61.1%       62.0%
       Free-to-guest                          21.5%       19.9%
       Other revenue                           7.8%       29.5%
       Overall (composite)                    55.3%       56.8%

     Guest Pay direct costs increased 42.2%, or $2.9 million, in the first 
quarter of 1997 as compared to the year earlier quarter.  Since Guest Pay 
direct costs (primarily studio license fees, video game license fees and the 

March 31, 1997                                                          Page 10
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


commission retained by the hotel) are primarily based on related revenue, 
such direct costs tend to vary more or less directly with revenue.  As a 
percentage of revenue, such costs decreased from 38.9% in the first quarter 
of 1996 to 38.0% in the current quarter.  The relative decrease in Guest Pay 
direct costs (as a percentage of revenue) reflects lower movie-related costs 
due to proportionately less revenue from newly-released motion pictures 
partially offset by the cost-related effect of increased video game revenue 
(which generally has a higher direct cost on a percentage of revenue basis 
than movies) in the Guest Pay revenue mix.

     Free-to-guest direct costs increased 3.0% or $51,000 in the first 
quarter of 1997 as compared to the year earlier quarter.  As a percentage of 
free-to-guest revenue, free-to-guest direct costs increased to 80.1% from 
78.5% in the year-earlier quarter.  The relative increase in free-to-guest 
direct costs (as a percentage of revenue) resulted from higher costs for both 
premium and non-premium programming in the first quarter of 1997, in 
comparison to the same quarter in the prior year, and to a lesser extent to a 
slightly higher proportion of non-premium programming in the mix of 
programming services delivered.

     Direct costs associated with other revenue increased 129% to $1.4 
million in the first quarter of 1997 from $591,000 in the year earlier 
quarter.  As a percentage of related revenues, such direct costs decreased to 
70.5% of other revenue in the current quarter versus 92.2% in the first 
quarter of 1996, primarily reflecting the effect of the increased equipment 
sales discussed above.

     The Company's overall gross profit increased 49.6%, or $5.6 million, to 
$16.8 million in the first quarter of 1997 on a 45.6% increase in revenues in 
comparison to the same period in the prior year.  The Company's overall gross 
profit margin was 56.8% in the current quarter, as compared to the year 
earlier 55.3%.

     Operating Expenses -- The following table sets forth information in 
regard to the Company's operating expenses for the quarter ending March 31 
(dollar amounts in thousands):

                                         1996                 1997
                                    ------------------  -------------------
                                            Percent of           Percent of
                                               Total                Total
                                     Amount  Revenues    Amount   Revenues
                                    -------- --------   --------  --------
Guest Pay operations                $  3,163   15.5%    $  4,693    15.8%
Selling, general and administrative    2,849   14.0%       5,056    17.0%
Depreciation and amortization          6,173   30.3%       9,695    32.7%
                                    --------            --------
  Total operating expenses          $ 12,185   59.8%    $ 19,444    65.6%
                                    --------            --------
                                    --------            --------

     Guest Pay operations expense increased 48.4%, or $1.5 million, from $3.2 
million in the comparable quarter of the previous year.  This increase is 
primarily attributable to the 47.4% increase in the average number of 
installed Guest Pay rooms in the current period as compared to the year 
earlier quarter. Per average installed Guest Pay room, such expenses averaged 
$3.80 per month in the current quarter as compared to $3.77 per month in the 
same quarter of 1996. The slight comparative increase on a per-room basis was 
primarily the result of higher marketing, and service and support expenses.

     Selling, general and administrative expenses increased 77%, or $2.2 
million, from $2.8 million in the first quarter of 1996.  The increase 
reflects the effects of substantially increased litigation-related expenses 
($1.0 million during the first quarter of 1997 as compared to $.1 million 
during the first quarter of 1996), an increase in the number of development 
and administrative personnel and increased facilities-related expenses.  As a 
percentage of revenue, such expenses were 17.0% in the current quarter as 
compared to 14.0% in the year earlier period.

     Depreciation and amortization expenses increased 57.1% to $9.7 million 
in the first quarter of 1997 from $6.2 million in the year earlier quarter.  
This increase is directly attributable to the increases in the number of 
installed Guest Pay and game service equipped rooms previously discussed, 
associated software and other capitalized costs such as service vans, 
equipment and computers that are related to the increased number of rooms in 
service since the year-earlier quarter.


March 31, 1997                                                          Page 11
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


     Operating Loss -- The Company's operating loss, as a result of the 
factors previously discussed, was $(2.6) million in the current quarter as 
compared to $(.9) million in the same quarter of 1996.

     Interest Expense -- Interest expense, net of interest income, increased 
to $4.1 million in the current quarter from $1.9 million in the comparable 
quarter of 1996 due to increases in long-term debt to fund the Company's 
continuing expansion of its business.  Long-term debt increased from $73.1 
million at March 31, 1996 to $179.3 million at March 31, 1997.  Average 
principal amount of long-term debt (excluding amounts under the revolving 
facility) outstanding, during the quarter ended March 31, 1997, was 
approximately $179 million (at an average interest rate of approximately 
10.5%) as compared to an average principal amount outstanding of 
approximately $68 million (at an average interest rate of approximately 
10.7%) during the comparable period of 1996.

     Net Loss -- For the reasons previously discussed, the Company's net loss 
increased to $(6.7) million in the first quarter of 1997 from a net loss of 
$(2.9) million in the same quarter a year earlier.

     EBITDA -- As a result of increasing revenues from Guest Pay services, 
and the other factors previously discussed, EBITDA (defined as "earnings 
before interest, income taxes, depreciation and amortization") increased 
35.3% to $7.1 million in the first quarter of 1997 as compared to $5.2 
million in the first quarter of 1996.  EBITDA as a percentage of total 
revenues was 23.9% in the current quarter as compared to 25.7% in the same 
quarter of 1996.  Absent the litigation-related expenses discussed above, 
EBITDA would have been approximately $8.1 million during the first quarter of 
1997 as compared to $5.3 million during the same quarter last year.  As a 
percentage of revenue, EBITDA would have equaled 27.3% during the first 
quarter of 1997 versus 26.2% in the same period of 1996.  EBITDA is included 
herein because it is a widely accepted financial indicator used by certain 
investors and financial analysts to assess and compare companies on the basis 
of operating performance.  EBITDA is not intended to represent an alternative 
to net income (as determined in accordance with generally accepted accounting 
principles) as a measure of performance, but management believes that it does 
provide an important additional perspective on the Company's operating 
results and the Company's ability to service its long-term debt and to fund 
the Company's continuing growth.

                                 SEASONALITY

     The Company's operating results from its lodging activities are subject 
to fluctuation depending upon hotel occupancy rates and buy rates, among 
other factors.  Typically, occupancy rates are higher during the second and 
third calendar quarters than in the first and fourth quarters due to seasonal 
travel patterns.

             FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     On September 15, 1994, the Company issued $28 million principal amount 
of 9.95% Senior Notes to three insurance companies in a private placement. On 
April 13, 1995, concurrently with certain amendments to the Note Purchase 
Agreement, the Company issued $5 million principal amount of 10.35% Senior 
Notes under such agreement in a private placement to certain holders of the 
9.95% Senior Notes. As part of the transaction in which the Company issued 
its 10.25% Senior Notes (discussed further below) the Company redeemed the 
9.95% and 10.35% Senior Notes in their entirety, which represented a use of 
proceeds of approximately $28.9 million in principal amount, plus accrued 
interest, and a make-whole premium of approximately $2.8 million.

     On August 9, 1995, the Company issued $20 million principal amount of 
its 11.5% Senior Subordinated Notes due July 15, 2005 (the 11.5% Senior 
Notes) to three insurance companies in a private placement. On October 4, 
1995, the Company issued an additional $10 million principal amount of such 
11.5% Senior Notes to the same purchasers and under identical terms and 
conditions.  In connection with the issuance of its 10.25% Senior Notes, the 
Company and the holders of the 11.5% Senior Notes amended the terms of the 
11.5% Senior Notes to provide that such notes rank PARI PASSU with, and have 
substantially the same covenants as,  the 10.25% Senior Notes. The 11.5% 
Senior Notes are unsecured and bear interest at the fixed rate of 11.5%, 
payable semi-annually.  Mandatory annual principal payments of $6 million 
commence July 15, 2001.

     Net proceeds of the August 9, 1995 issue of the 11.5% Senior Notes, net 
of original issue discount and issuance-related expenses, were approximately 
$18.1 million, and were used to (i) repay $10.0 million outstanding 


March 31, 1997                                                          Page 12
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


under the Company's then existing revolving facility and (ii) provide funding 
for capital expenditures to expand the Company's guest pay services business. 
The net proceeds from the October 4, 1995 issue of  the 11.5% Senior Notes, 
net of original issue discount and issuance-related expenses, were 
approximately $9.2 million and provided additional capital to fund the 
expansion of the Company's guest pay services business. 

     In connection with the December 19, 1996 issuance of its 10.25% Senior 
Notes, the Company repaid all of the outstanding borrowing under its then 
bank credit facility, approximately $20.4 million, and amended and restated 
such facility. The amended and restated bank credit facility (the 1997 
Facility) provides for total lending commitments of $100.0 million (which can 
be increased to $175.0 million with the consent of NatWest Bank) and contains 
certain covenants, including the maintenance of certain financial ratios, 
limitations on the incurrence of additional indebtedness, limitations on the 
incurrence of certain liens, limitations on certain payments or distributions 
in respect of the common stock and provisions for acceleration of principal 
repayment in certain circumstances.   At May 5, 1997 no amounts had been 
drawn by the Company under the 1997 Facility.  The Company was in compliance 
with all such covenants as of March 31, 1997.  The 1997 Facility is secured 
by (i) a first priority security interest in all of the Company's and certain 
of its subsidiaries' tangible and intangible assets and (ii) a guarantee by 
ResNet of all amounts advanced to it by the Company.  Amounts borrowed under 
the 1997 Facility bear interest at either (i) LIBOR plus from 1.25% to 2.00% 
or (ii) the greater of (a) the NatWest Bank prime rate plus from .25% to 
1.00% or (b) the federal funds rate plus from .75% to 1.50%, depending on the 
Company's total leverage, as defined in the agreement.  The banks' commitment 
under the 1997 Facility is subject to a scheduled reduction of 15% beginning 
in December 1998 and annually thereafter as follows: December 1999 -- 20%; 
December 2000 -- 20%; December 2001 -- 20%; and December 2002 -- 25%.

     On May 23, 1996, the Company sold 3,680,000 shares of the Company's 
Common Stock for net proceeds of approximately $44.6 million. Such proceeds 
were used to repay approximately $25.9 million of borrowings outstanding 
under the then existing credit facility, and to provide working capital for 
the continuing expansion of the Company's lodging and residential business. 

     On October 21, 1996, the Company and ResNet entered into agreements with 
TCI Satellite pursuant to which TCI Satellite acquired a 4.99% equity 
interest in ResNet for a purchase price of $5.4 million in cash (the "Stock 
Payment") and agreed to provide ResNet with long-term access to a DBS signal 
on a nationwide basis. In addition, TCI Satellite agreed to advance up to 
$34.6 million to ResNet during the five years ending October 21, 2001, under 
a convertible note agreement (the "TCI Convertible Note") to purchase DBS 
equipment. The TCI Convertible Note is subject to mandatory conversion into a 
maximum 32.0% equity interest in ResNet at such time as conversion is not 
restricted by FCC regulations. The TCI Convertible Note is unsecured, payable 
solely in shares of ResNet's common stock, non-recourse to the Company, and 
subordinated to all present and future borrowings by ResNet including any 
borrowings from the Company by ResNet. Interest accrues (generally at TCI's 
average borrowing rate) on amounts outstanding under the TCI Convertible 
Note, but such interest is not payable in cash (and does not increase the 
equity interest into which the TCI Convertible Note will be converted). 

     On December 19, 1996, the Company issued $150 million, principal amount, 
of unsecured 10.25% Senior Notes (the Notes) in a private offering in 
accordance with Rule 144A of The Securities Act of 1933, as amended (the 
Securities Act). The proceeds of the Notes, which were issued at par, after 
placement fees and offering expenses, were approximately $143.2 million.  
Approximately $31.7 million of such proceeds was used to redeem the 
outstanding principal amounts of the 9.95% and 10.35% Senior Notes and to 
prepay all outstanding amounts under the Company's then revolving credit 
facility, both as previously discussed.  The remaining proceeds, 
approximately $91.1 million, were invested in highly liquid, interest-bearing 
securities pending their use for funding capital expenditures to expand the 
Company's lodging and residential businesses.  On April 11, 1997, the Company 
filed a registration statement with the Securities and Exchange Commission to 
effect an offer to exchange the Notes for identical Notes registered under 
the Securities Act of 1933, as amended.

     The Company has incurred operating and net losses due in large part to 
the depreciation, amortization and interest expenses related to the capital 
required to expand its lodging and residential businesses. The growth of the 
Company's business requires substantial capital to finance expansion of its 
lodging and multi-family residential businesses. The Company expects that 
losses will increase as the Company implements its expansion strategy. 
Historically, cash flow from operations has not been sufficient to fund the 
cost of expanding the Company's business and to service existing 
indebtedness. Capital expenditures were approximately $26.9 million during 
the first quarter of 1997, and net cash provided by operating activities was 
approximately $.9 million.


March 31, 1997                                                          Page 13
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


     Depending on the rate of growth of its lodging and residential 
businesses and other factors, the Company expects to incur capital 
expenditures of between approximately $55 to $85 million during the remainder 
of 1997 and substantial amounts thereafter. The actual amount and timing of 
the Company's capital expenditures will vary (and such variations could be 
material) depending upon the number of new contracts for services entered 
into by the Company, the costs of installations and other factors; however, 
this is a forward-looking statement and there can be no assurance in this 
regard. In addition, the 1997 Facility limits the amount of the Company's 
annual capital expenditures to a certain base amount plus the amounts of 
certain additional financing. 

     The Company believes that the net proceeds from the 10.25% Senior Notes, 
the funds to be provided by TCI Satellite, its operating cash flows and 
borrowings permitted under the 1997 Facility will be sufficient to fund the 
Company's cash requirements for 12 to 18 months; however, this is a 
forward-looking statement and there can be no assurance in this regard.  
After such time, the Company may incur additional amounts of indebtedness.  
If the Company's plans or assumptions change, if its assumptions prove to be 
inaccurate or if the Company experiences unanticipated costs or competitive 
pressures, the Company may be required to seek additional capital sooner than 
currently anticipated. There can be no assurance that the Company will be 
able to obtain financing, or, if such financing is available, that the 
Company will be able to obtain it on acceptable terms. Failure to obtain 
additional financing, if needed, could result in the delay or abandonment of 
some or all of the Company's expansion plans.

EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     During March 1997, the Financial Accounting Standards Board released 
Statement of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings 
per Share", which requires the disclosure of basic earnings per share and 
diluted earnings per share.  The Company will adopt SFAS 128 at the end of 
1997 and anticipates that it will have no effect on previously reported 
earnings per share.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS -- CERTAIN STATEMENTS IN 
THIS QUARTERLY REPORT ON FORM 10-Q CONSTITUTE "FORWARD-LOOKING STATEMENTS" 
WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE 
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.  WHEN USED IN THIS QUARTERLY 
REPORT, THE WORDS "EXPECTS," "ANTICIPATES," "ESTIMATES," "BELIEVES," "NO 
ASSURANCE," AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH 
FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND 
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS, WHICH MAY CAUSE THE COMPANY'S 
ACTUAL PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE 
RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH 
FORWARD-LOOKING STATEMENTS.  IN ADDITION TO THE RISKS AND UNCERTAINTIES 
DISCUSSED IN THIS QUARTERLY REPORT, SUCH FACTORS INCLUDE, AMONG OTHERS, THE 
FOLLOWING:  THE IMPACT OF COMPETITION AND CHANGES TO THE COMPETITIVE 
ENVIRONMENT FOR THE COMPANY'S PRODUCTS AND SERVICES, CHANGES IN TECHNOLOGY, 
RELIANCE ON STRATEGIC PARTNERS, UNCERTAINTY OF LITIGATION, CHANGES IN 
GOVERNMENT REGULATION AND OTHER FACTORS DETAILED,  FROM TIME TO TIME, IN THE 
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.  THESE 
FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS QUARTERLY 
REPORT.  THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO 
RELEASE PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS 
CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH 
REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH 
ANY SUCH STATEMENT IS BASED.


March 31, 1997                                                          Page 14
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


                       PART II -- OTHER INFORMATION

ITEM 1 -- LEGAL PROCEEDINGS

     On February 16, 1995, On Command Video Corporation filed a lawsuit in 
Federal District Court for the Northern District of California asserting 
patent infringement by the Company relating to its on-demand video system.  
The complaint requests an unspecified amount of damages and injunctive 
relief. The Company filed an answer and counterclaim to the lawsuit on April 
17, 1995, denying the claims, asserting affirmative defenses and asserting a 
counterclaim for declaratory relief.  The Company is currently engaged in 
litigation with respect to this matter and trial is expected to begin on 
September 29, 1997. Based on the advice of special patent counsel and 
technical experts retained by the Company, as well as the Company's 
independent analysis, the Company believes that the claims of infringement 
are unfounded.  The Company has and will continue to vigorously defend itself 
in this matter.  Patent litigation is especially complex, both as to factual 
allegations and the legal interpretation of patent claims, which makes such 
lawsuits difficult to assess with certainty. While the Company and its patent 
counsel believe the Company has a number of defenses available, which, if 
properly considered, would eliminate or minimize any liability for the 
Company, an unexpected unfavorable resolution, depending on the amount and 
timing, could adversely affect the Company.  Although the outcome of any 
litigation cannot be predicted with certainty, the Company believes that the 
ultimate disposition of this matter will not have a material adverse effect 
on the Company's business or financial condition.

     From time to time, the Company is subject to other litigation arising in 
the ordinary course of business.  As of the date hereof, in the opinion of 
management, the resolution of such other litigation will not have a material 
adverse effect upon the Company's business or financial condition.

ITEM 2 -- CHANGES IN SECURITIES

     Not applicable.

ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

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

     Not applicable.

ITEM 5 -- OTHER INFORMATION

     Not applicable.

ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K

     A.  EXHIBITS:

          Exhibit 11.1 -- Statement Regarding Computation of  Net Loss Per
          Common Share.

     B.  REPORTS ON FORM 8-K:

          The Company filed no Reports on Form 8 - K during the three months
          ended March 31, 1997. 


March 31, 1997                                                          Page 15
<PAGE>
LodgeNet Entertainment Corporation                                     Form 10-Q


                     LODGENET ENTERTAINMENT CORPORATION

                                  FORM 10-Q


                                  SIGNATURES


     Pursuant to the requirements of the Securities and Exchange Act of 1934, 
the Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                  LODGENET ENTERTAINMENT CORPORATION
                                  ----------------------------------
                                             (Registrant)


Date:  May 8, 1997                  / s /  TIM C. FLYNN
                                  -------------------------------
                                    Tim C. Flynn
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)


Date:  May 8, 1997                  / s /  JEFFREY T. WEISNER
                                  -------------------------------
                                    Jeffrey T. Weisner
                                    Vice President - Finance
                                    (Principal Financial and Accounting Officer)



March 31, 1997                                                          Page 16