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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended August 31, 2005
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from  to
 Commission File Number 0-9385
 BULL RUN CORPORATION
  Georgia
(State or other jurisdiction
incorporation or organization)
    
    58-2458679
(I.R.S. Employer
Identification No.)4370 Peachtree Road, N.E., Atlanta, GA
(Address of principal executive offices)
    
    30319
(Zip Code)
 (404) 266-8333
  Title of each class: None
    
    Name of each exchange on which registered: N/A
 Securities registered pursuant to Section 12(g) of the Act:
    
    Common Stock, $.01 par value
(Title of class)
 þ o
 þ
 o þ
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE
 Documents
    
    Form 10-K ReferenceNone
    
    Not Applicable




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BULL RUN CORPORATION
FORM 10-K
For the fiscal year ended August 31, 2005
 INDEX
 PagePART IItem 1
    
    Business
    
    
    3Item 2
    
    Properties
    
    
    7Item 3
    
    Legal Proceedings
    
    
    7Item 4
    
    Submission of Matters to a Vote of Securities Holders
    
    
    8PART IIItem 5
    
    Market for
Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    9Item 6
    
    Selected Financial Data
    
    
    9Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 7A
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 8
    
    Financial Statements and Supplementary Data
    
    
    28Item 9
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    58Item 9A
    
    Controls and Procedures
    
    
    58Item 9B
    
    Other Information
    
    
    59PART IIIItem 10
    
    Directors and Executive Officers of the Registrant
    
    
    59Item 11
    
    Executive Compensation
    
    
    61Item 12
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    63Item 13
    
    Certain Relationships and Related Transactions
    
    
    65Item 14
    
    Principal Accountant Fees and Services
    
    
    67PART IVItem 15
    
    Exhibits and Financial Statement Schedules
    
    
    68Signatures
    
    
    71EX-21EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
  2




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PART I
 
 Item 1. Business
 General
     Collegiate Marketing and Production Services Segment
 Collegiate Sports 
 
    
    production of radio and television broadcasts of certain athletic events and coaches shows;
    
    sale of advertising during radio and television broadcasts of games and coaches shows;
    
    sale of media advertising and venue signage;
    
    sale of official sponsorship rights to corporations;
    
    publishing, printing and vending of game-day and other programs;
    
    creative design of materials, video production, and construction and management of
Internet web sites; and
 3




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
    
    coaches endorsements and pay-per-view telecasts.
    Integrated Media Group 
  Association Management Services Segment
  4




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Discontinued Segments
 ®
    Sales and Marketing
   5




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Competition
   Seasonality
  Employees
  Executive Officers
  6




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Available Information
   
 Item 2. Properties
   
 Item 3. Legal Proceedings
 Sarkes Tarzian, Inc. v. Bull Run Corporation and Gray Television, Inc.
   7




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Item 4. Submission of Matters to a Vote of Security Holders
  8




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PART II
 
 Item 5. Market for the Registrants Common Equity and Related Stockholder Matters
 Market Information 
  High
    
    
    LowFiscal Year Ended August 31, 2004First Quarter ended November 30, 2003
    
    $
    3.61
    
    
    $
    1.01Second Quarter ended February 29, 2004
    
    
    1.80
    
    
    
    .51Third Quarter ended May 31, 2004
    
    
    .65
    
    
    
    .48Fourth Quarter ended August 31, 2004
    
    
    .50
    
    
    
    .18Fiscal Year Ended August 31, 2005First Quarter ended November 30, 2004
    
    $
    .85
    
    
    $
    .23Second Quarter ended February 28, 2005
    
    
    .70
    
    
    
    .36Third Quarter ended May 31, 2005
    
    
    .91
    
    
    
    .60Fourth Quarter ended August 31, 2005
    
    
    .90
    
    
    
    .38
 Holders 
  Dividends 
  
 Item 6. Selected Financial Data
  9




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##### Table of Contents



SELECTED FINANCIAL DATA
 STATEMENT OF OPERATIONS DATA:
 Two Months EndedYear Ended August 31,
    
    
    August 31,
    
    
    Year Ended June 30,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2002
    
    
    2001(Unaudited)Total revenue
    
    $
    61,879
    
    
    $
    55,779
    
    
    $
    64,129
    
    
    $
    4,591
    
    
    $
    7,853
    
    
    $
    93,813
    
    
    $
    96,136Loss from continuing operations
    
    
    (5,141
    )
    
    
    (7,137
    )
    
    
    (28,444
    )
    
    
    (3,946
    )
    
    
    (3,490
    )
    
    
    (32,278
    )
    
    
    (16,143
    )Net loss
    
    
    (5,290
    )
    
    
    (14,611
    )
    
    
    (37,986
    )
    
    
    (5,355
    )
    
    
    (3,428
    )
    
    
    (34,558
    )
    
    
    (18,704
    )Net loss available to common
stockholders
    
    
    (5,290
    )
    
    
    (16,848
    )
    
    
    (39,135
    )
    
    
    (5,448
    )
    
    
    (3,473
    )
    
    
    (34,954
    )
    
    
    (18,704
    )Loss from continuing operations
available to common
stockholders per basic and
diluted common share
    
    $
    (0.81
    )
    
    $
    (2.01
    )
    
    $
    (7.42
    )
    
    $
    (1.07
    )
    
    $
    (0.98
    )
    
    $
    (8.96
    )
    
    $
    (4.57
    )
 BALANCE SHEET DATA:
 As of August 31,
    
    
    As of June 30,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2002
    
    
    2001Working capital (deficit)
    
    $
    (26,229
    )
    
    $
    (19,146
    )
    
    $
    (12,034
    )
    
    $
    (32,252
    )
    
    $
    (26,827
    )
    
    $
    (16,951
    )Investment in affiliated companies
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    25,013
    
    
    
    25,115
    
    
    
    50,399Total assets
    
    
    64,676
    
    
    
    60,942
    
    
    
    73,812
    
    
    
    143,780
    
    
    
    151,007
    
    
    
    201,061Amounts due to (due from)
related parties
    
    
    11,786
    
    
    
    9,290
    
    
    
    96
    
    
    
    (127
    )
    
    
    (100
    )
    
    
    68Long-term obligations
    
    
    61,625
    
    
    
    64,625
    
    
    
    72,641
    
    
    
    93,091
    
    
    
    98,091
    
    
    
    107,693Redeemable preferred stock,
noncurrent liability
    
    
    22,082
    
    
    
    24,296
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-Stockholders deficit
    
    
    (59,061
    )
    
    
    (56,551
    )
    
    
    (27,002
    )
    
    
    (2,188
    )
    
    
    (1,274
    )
    
    
    37,604
 NOTES TO THE SELECTED FINANCIAL DATA
  2005
    
     Bank debt of $7.5 million classified as a current liability at August 31, 2005 (noncurrent at August 31, 2004.)
 2004
    
     Intangibles impairment charge of $3.3 million; classification of redeemable preferred stock of $24.3 million as a noncurrent liability (of which, $19.7 million is held by the Companys Chairman or one of his affiliates) since the Chairmans beneficial ownership of the Companys outstanding common stock exceeded 50% at August 31, 2004 for the first time (such preferred stock was previously included as a component of stockholders deficit).
 2003
    
     Sale of investments in Gray Television, Inc. common stocks, warrants
for Gray common stocks and Rawlings Sporting Goods Company, Inc.
common stock, resulting in an aggregate gain of $17.2 million, with $38 million of
the proceeds being applied to long-term debt; impairment charge of $30.5 million taken to reduce the carrying value
of goodwill and other acquisition intangible assets (of which,
$7.0 million included in discontinued operations); and an aggregate of $5.2 million in valuation impairment charges taken to reduce carrying value of investments in affiliates and non-trade receivables.
 2002
    
     Sale of investments in Gray preferred stock and Sarkes Tarzian, Inc. common stock with such proceeds being applied to long-term debt; and the acceleration of costs and expenses, including an intangibles impairment charge of $6.6 million, as a result of a change in a significant contractual relationship; proportionate share of Grays accounting change cumulative effect adjustment, net of tax.
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 OVERVIEW
  10




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CERTAIN RELATIONSHIPS
 % %
   11




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CRITICAL ACCOUNTING POLICIES
  Revenue Recognition and Rights Fee Expenses 
  12




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Goodwill and Other Intangible Assets 
    13




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Deferred Income Taxes 
  Valuation of Certain Non-Trade Receivables 
   Transactions with Related Parties 
  14




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LIQUIDITY AND CAPITAL RESOURCES
 Credit Arrangements 
     15




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16




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Historical Cash Flow Information   Summary 
  Year Ended August 31,2005
    
    
    2004
    
    
    2003Cash flows from operating activities:Continuing operations
    
    $
    (4,579
    )
    
    $
    (4,130
    )
    
    $
    6,831Discontinued operations
    
    
    (1,558
    )
    
    
    (6,363
    )
    
    
    (11,918
    )Cash flows from investing activities:Continuing operation investing activities
    
    
    (207
    )
    
    
    (533
    )
    
    
    45,290Discontinued operation investing activities
    
    
    1,333
    
    
    
    447
    
    
    
    (117
    )Cash flows from financing activities
    
    
    4,708
    
    
    
    6,509
    
    
    
    (35,963
    )Net increase (decrease) in cash and cash equivalents
    
    $
    (303
    )
    
    $
    (4,070
    )
    
    $
    4,123
 Historical Cash Flow Information  Cash Flows from Operating Activities 
  Year Ended August 31,2005
    
    
    2004
    
    
    2003Operating income (loss) from continuing operations
    
    $
    1,653
    
    
    $
    (2,694
    )
    
    $
    (21,012
    )Depreciation, amortization and impairment charges
included in operating income (loss)
    
    
    1,339
    
    
    
    5,700
    
    
    
    32,949Interest expense, net of noncash preferred stock dividends
    
    
    (4,421
    )
    
    
    (4,416
    )
    
    
    (8,005
    )Net change in operating assets and liabilities
    
    
    (3,142
    )
    
    
    (2,570
    )
    
    
    2,893Other changes in operating cash flows
    
    
    (8
    )
    
    
    (150
    )
    
    
    6Total cash flows from continuing operations
    
    
    (4,579
    )
    
    
    (4,130
    )
    
    
    6,831Cash flows from discontinued operating activities
    
    
    (1,558
    )
    
    
    (6,363
    )
    
    
    (11,918
    )Total cash flows from operating activities
    
    $
    (6,137
    )
    
    $
    (10,493
    )
    
    $
    (5,087
    )
  17




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Historical Cash Flow Information   Cash Flows from Investing Activities 
  Year Ended August 31,2005
    
    
    2004
    
    
    2003Capital expenditures
    
    $
    (195
    )
    
    $
    (384
    )
    
    $
    (230
    )Proceeds on dispositions of investments
    
    
    
    
    
    
    
    
    
    
    46,183Other investing cash flows
    
    
    (12
    )
    
    
    (149
    )
    
    
    (663
    )Total cash
flows from continuing operation investing activities
    
    
    (207
    )
    
    
    (533
    )
    
    
    45,290Cash flows from discontinued operation investing activities
    
    
    1,333
    
    
    
    447
    
    
    
    (117
    )Total cash flows from investing activities
    
    $
    1,126
    
    
    $
    (86
    )
    
    $
    45,173
   Historical Cash Flow Information   Cash Flows from Financing Activities 
  Year Ended August 31,2005
    
    
    2004
    
    
    2003Net borrowings on notes payable and revolving line of credit
    
    $
    3,000
    
    
    $
    
    
    
    $
    175Borrowings on note issued by related party
    
    
    1,500Net repayments on long-term debt
    
    
    (590
    )
    
    
    
    
    
    
    (38,000
    )Cash advances made by stockholder
    
    
    1,500
    
    
    
    4,550Issuance of preferred stock
    
    
    
    
    
    
    2,000
    
    
    
    3,000Preferred stock dividends paid
    
    
    (257
    )Debt issue costs and other financing cash flows
    
    
    (445
    )
    
    
    (41
    )
    
    
    (1,138
    )Total cash flows from financing activities
    
    $
    4,708
    
    
    $
    6,509
    
    
    $
    (35,963
    )
  OFF BALANCE SHEET ARRANGEMENTS
  18




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CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
  Payments Due by Period as of August 31, 2005Less than
    
    
    More than 1
    
    
    More than 3
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    to 3 Years
    
    
    to 5 Years
    
    
    5 YearsLong-term debt obligations
    
    $
    69,125
    
    
    $
    7,500
    
    
    $
    61,625
    
    
    $
    
    
    
    $Interest obligations
    
    
    3,039
    
    
    
    2,011
    
    
    
    1,028Capital lease obligations
    
    
    182
    
    
    
    80
    
    
    
    102Operating lease obligations
    
    
    3,582
    
    
    
    1,137
    
    
    
    1,053
    
    
    
    945
    
    
    
    447Purchase obligations
    
    
    70,722
    
    
    
    16,591
    
    
    
    21,191
    
    
    
    9,478
    
    
    
    23,462Total
    
    $
    146,650
    
    
    $
    27,319
    
    
    $
    84,999
    
    
    $
    10,423
    
    
    $
    23,909
     19




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RESULTS OF CONTINUING OPERATIONS  FISCAL YEAR ENDED AUGUST 31, 2005 COMPARED TO FISCAL YEAR ENDED
AUGUST 31, 2004
 Results Derived from Operating Businesses 
  Year Ended August 31,2005
    
    
    2004RevenuesCollegiate Marketing and Production Services
    
    $
    53,212
    
    
    $
    47,106Association Management Services
    
    
    8,667
    
    
    
    8,673$
    61,879
    
    
    $
    55,779Operating
Costs and ExpensesDirect operating costs of services rendered
    
    $
    40,776
    
    
    $
    35,699Selling, general and administrative
    
    
    17,966
    
    
    
    18,220Costs incurred in connection with the merger
    
    
    766Amortization and impairment of acquisition intangibles
    
    
    718
    
    
    
    4,554$
    60,226
    
    
    $
    58,473Income
(Loss) from OperationsCollegiate Marketing and Production Services
    
    $
    2,275
    
    
    $
    977Association Management Services
    
    
    1,794
    
    
    
    2,009Amortization and impairment of acquisition intangibles
    
    
    (718
    )
    
    
    (4,554
    )Unallocated general and administrative costs
    
    
    (1,698
    )
    
    
    (1,126
    )$
    1,653
    
    
    $
    (2,694
    )
  20




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Results Derived from Derivative Instruments 
  Interest Expense and Debt Related Costs 
  21




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Income Taxes 
  RESULTS OF CONTINUING OPERATIONS  FISCAL YEAR ENDED AUGUST 31, 2004 COMPARED TO FISCAL YEAR ENDED
AUGUST 31, 2003
 Results
Derived from Operating Businesses 
  Year Ended August 31,2004
    
    
    2003RevenuesCollegiate Marketing and Production Services
    
    $
    47,106
    
    
    $
    55,354Association Management Services
    
    
    8,673
    
    
    
    8,775$
    55,779
    
    
    $
    64,129Operating
Costs and ExpensesDirect operating costs of services rendered
    
    $
    35,699
    
    
    $
    42,603Selling, general and administrative
    
    
    18,220
    
    
    
    20,397Amortization and impairment of acquisition intangibles
    
    
    4,554
    
    
    
    22,141$
    58,473
    
    
    $
    85,141Income
(Loss) from OperationsCollegiate Marketing and Production Services
    
    $
    977
    
    
    $
    930Association Management Services
    
    
    2,009
    
    
    
    1,553Amortization and impairment of acquisition intangibles
    
    
    (4,554
    )
    
    
    (22,141
    )Unallocated general and administrative costs
    
    
    (1,126
    )
    
    
    (1,354
    )$
    (2,694
    )
    
    $
    (21,012
    )
 22




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Results Derived from Investments and Derivative Instruments 
   23




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Interest Expense and Debt Related Costs 
   Income Taxes 
  RESULTS OF DISCONTINUED OPERATIONS
   24




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Year Ended August 31,2005
    
    
    2004
    
    
    2003Revenues:Affinity Events
    
    $
    655
    
    
    $
    10,843
    
    
    $
    14,052Consulting
    
    
    
    
    
    
    
    
    
    
    5,664$
    655
    
    
    $
    10,843
    
    
    $
    19,716Costs and Expenses:Affinity Events:Direct operating costs of services rendered
    
    $
    426
    
    
    $
    9,020
    
    
    $
    12,467Selling, general and administrative
    
    
    378
    
    
    
    9,297
    
    
    
    5,481Amortization and impairment of acquisition intangibles
    
    
    
    
    
    
    
    
    
    
    9,615$
    804
    
    
    $
    18,317
    
    
    $
    27,563Income (Loss) from Discontinued Operations:Affinity Events
    
    $
    (149
    )
    
    $
    (7,474
    )
    
    $
    (3,896
    )Consulting
    
    
    
    
    
    
    
    
    
    
    5,664Amortization and impairment of acquisition intangibles
    
    
    
    
    
    
    
    
    
    
    (9,615
    )Datasouth
    
    
    
    
    
    
    
    
    
    
    (1,695
    )$
    (149
    )
    
    $
    (7,474
    )
    
    $
    (9,542
    )
     25




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INTEREST RATE AND MARKET RATE RISK
   26




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FORWARD-LOOKING STATEMENTS
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  27




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Item 8. Financial Statements and Supplementary Data
  PageReport of Independent Registered Public Accounting Firm
    
    29Consolidated Balance Sheets as of August 31, 2005 and 2004
    
    30Consolidated Statements of Operations for each of the three years in the
period ended August 31, 2005
    
    31Consolidated Statements of Stockholders Deficit for each of the three years
in the period ended August 31, 2005
    
    32Consolidated Statements of Cash Flows for each of the three years in the
period ended August 31, 2005
    
    33Notes to Consolidated Financial Statements
    
    34Selected Quarterly Financial Data (Unaudited)
    
    57
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      
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BULL RUN CORPORATION
CONSOLIDATED BALANCE SHEETS
 August 31,
    
    
    August 31,2005
    
    
    2004ASSETSCurrent assets:Cash and cash equivalents
    
    $
    147
    
    
    $
    450Accounts receivable, net of allowance of $302 and $309 as of
August 31, 2005 and 2004, respectively
    
    
    10,647
    
    
    
    5,219Inventories
    
    
    1,113
    
    
    
    663Prepaid costs and expenses
    
    
    1,038
    
    
    
    1,757Total current assets
    
    
    12,945
    
    
    
    8,089Property and equipment, net
    
    
    2,767
    
    
    
    3,184Goodwill
    
    
    40,364
    
    
    
    40,364Customer relationships and trademarks
    
    
    7,591
    
    
    
    8,308Other assets
    
    
    1,009
    
    
    
    997Total assets
    
    $
    64,676
    
    
    $
    60,942LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Current portion of long-term debt
    
    $
    7,500
    
    
    $
    590Accounts payable
    
    
    5,933
    
    
    
    5,866Deferred revenue
    
    
    8,285
    
    
    
    4,819Accrued fees payable to related party
    
    
    1,217
    
    
    
    1,721Advances from stockholder
    
    
    6,050
    
    
    
    4,550Accrued and other liabilities
    
    
    9,570
    
    
    
    9,215Net current liabilities of discontinued segment
    
    
    619
    
    
    
    474Total current liabilities
    
    
    39,174
    
    
    
    27,235Long-term
debt (including $4,519 and $3,019 payable to related parties as of
August 31, 2005 and 2004, respectively)
    
    
    61,625
    
    
    
    64,625Other liabilities, excluding redeemable preferred stock
    
    
    226
    
    
    
    497Net noncurrent liabilities of discontinued segments
    
    
    630
    
    
    
    840Redeemable preferred stock:Series D preferred stock, $.01 par value (authorized 100 shares;
issued and outstanding 12.5 shares; $12,497 liquidation value)
    
    
    12,497
    
    
    
    12,497Series E preferred stock, $.01 par value (authorized 25 shares;
issued and outstanding 7.6 shares having a $7,585 liquidation
value as of August 31, 2005 and 9.8 shares having a $9,799
liquidation value as of August 31, 2004)
    
    
    7,585
    
    
    
    9,799Series F preferred stock, $.01 par value (authorized 25 shares;
issued and outstanding 2.0 shares; $2,000 liquidation value)
    
    
    2,000
    
    
    
    2,000Total liabilities
    
    
    123,737
    
    
    
    117,493Commitments
and contingenciesStockholders deficit:Common stock, $.01 par value (authorized 100,000 shares;
issued 6,890 and 5,386 shares as of August 31, 2005 and
2004, respectively)
    
    
    69
    
    
    
    54Additional paid-in capital
    
    
    84,471
    
    
    
    81,706Accumulated deficit
    
    
    (143,601
    )
    
    
    (138,311
    )Total stockholders deficit
    
    
    (59,061
    )
    
    
    (56,551
    )Total liabilities and stockholders deficit
    
    $
    64,676
    
    
    $
    60,942
  30




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##### Table of Contents



BULL RUN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended August 31,2005
    
    
    2004
    
    
    2003Revenue from services rendered
    
    $
    61,879
    
    
    $
    55,779
    
    
    $
    64,129Operating costs and expenses:Direct operating costs of services rendered
    
    
    40,776
    
    
    
    35,699
    
    
    
    42,603Selling, general and administrative
    
    
    17,966
    
    
    
    18,220
    
    
    
    20,397Costs incurred in connection with proposed merger
    
    
    766Amortization and impairment of acquisition intangibles
    
    
    718
    
    
    
    4,554
    
    
    
    22,14160,226
    
    
    
    58,473
    
    
    
    85,141Operating income (loss)
    
    
    1,653
    
    
    
    (2,694
    )
    
    
    (21,012
    )Other income (expense):Net change in value of certain derivative instruments
    
    
    412
    
    
    
    1,294
    
    
    
    (1,035
    )Interest expense, related parties
    
    
    (2,345
    )
    
    
    (130
    )
    
    
    (113
    )Interest expense, other
    
    
    (4,093
    )
    
    
    (4,286
    )
    
    
    (8,054
    )Debt issue cost amortization, related parties
    
    
    (374
    )
    
    
    (783
    )
    
    
    (1,369
    )Debt issue cost amortization, other
    
    
    (386
    )
    
    
    (388
    )
    
    
    (998
    )Equity in losses of affiliated companies
    
    
    
    
    
    
    
    
    
    
    (204
    )Loss on issuance of shares by affiliate
    
    
    
    
    
    
    
    
    
    
    (2,339
    )Gain on disposition of investments
    
    
    
    
    
    
    
    
    
    
    17,150Reduction in valuation of investment in affiliates
    
    
    
    
    
    
    
    
    
    
    (5,189
    )Other expense, net
    
    
    (8
    )
    
    
    (150
    )
    
    
    (59
    )Loss from continuing operations before income taxes
    
    
    (5,141
    )
    
    
    (7,137
    )
    
    
    (23,222
    )Income tax provision
    
    
    
    
    
    
    
    
    
    
    (5,222
    )Loss from continuing operations
    
    
    (5,141
    )
    
    
    (7,137
    )
    
    
    (28,444
    )Loss from discontinued operations
    
    
    (149
    )
    
    
    (7,474
    )
    
    
    (9,542
    )Net loss
    
    
    (5,290
    )
    
    
    (14,611
    )
    
    
    (37,986
    )Preferred dividends
    
    
    
    
    
    
    (2,237
    )
    
    
    (1,149
    )Net loss available to common stockholders
    
    $
    (5,290
    )
    
    $
    (16,848
    )
    
    $
    (39,135
    )Loss per share available to common stockholders, basic and diluted:Loss from continuing operations
    
    $
    (0.79
    )
    
    $
    (2.01
    )
    
    $
    (7.42
    )Loss from discontinued operations
    
    
    (0.02
    )
    
    
    (1.60
    )
    
    
    (2.40
    )$
    (0.81
    )
    
    $
    (3.61
    )
    
    $
    (9.82
    )Weighted average number of common shares outstanding:Basic and diluted
    
    
    6,505
    
    
    
    4,668
    
    
    
    3,987
  31




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##### Table of Contents



BULL RUN CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT
 AdditionalPreferred
    
    
    Common Stock
    
    
    Paid-InStock
    
    
    Shares
    
    
    Amount
    
    
    CapitalAs of September 1, 2002
    
    $
    4,097
    
    
    
    3,855
    
    
    $
    38
    
    
    $
    79,448Cancellation of treasury stock
    
    
    
    
    
    
    (54
    )
    
    
    (1
    )
    
    
    (1,392
    )Exchange of Series B and C preferred
stock and subordinated notes for
Series D preferred stock
    
    
    7,183Issuance of Series D preferred stock
    
    
    3,000Issuance of common stock
    
    
    
    
    
    
    463
    
    
    
    5
    
    
    
    2,257Exercise of stock options
    
    
    
    
    
    
    60
    
    
    
    1
    
    
    
    206Tax effect of nonqualified stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (381
    )As of August 31, 2003
    
    $
    14,280
    
    
    
    4,324
    
    
    $
    43
    
    
    $
    80,138Exchange of subordinated notes and
Series D preferred stock for Series E
preferred stock
    
    
    8,016Issuance of Series F preferred stock
    
    
    2,000Issuance of common stock
    
    
    
    
    
    
    1,062
    
    
    
    11
    
    
    
    1,568Reclassify preferred stock to
redeemable preferred stock
    
    
    (24,296
    )As of August 31, 2004
    
    $
    0
    
    
    
    5,386
    
    
    $
    54
    
    
    $
    81,706Conversion of Series E redeemable preferred
stock to shares of common stock
    
    
    
    
    
    
    316
    
    
    
    3
    
    
    
    2,211Issuance of common stock
    
    
    
    
    
    
    1,188
    
    
    
    12
    
    
    
    554As of August 31, 2005
    
    $
    0
    
    
    
    6,890
    
    
    $
    69
    
    
    $
    84,471
 OtherComprehensive
    
    
    
    
    
    
    TotalTreasury
    
    
    Accumulated
    
    
    Accumulated
    
    
    Stockholders'Stock
    
    
    Loss
    
    
    Deficit
    
    
    DeficitAs of September 1, 2002
    
    $
    (1,393
    )
    
    $
    (2,050
    )
    
    $
    (82,328
    )
    
    $
    (2,188
    )Cancellation of treasury stock
    
    
    1,393
    
    
    
    
    
    
    
    
    
    
    
    0Exchange of Series B and C preferred
stock and subordinated notes for
Series D preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,183Issuance of Series D preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,000Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,262Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    207Tax effect of nonqualified stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (381
    )Other comprehensive income
    
    
    
    
    
    
    2,050
    
    
    
    
    
    
    
    2,050Preferred dividends
    
    
    
    
    
    
    
    
    
    
    (1,149
    )
    
    
    (1,149
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (37,986
    )
    
    
    (37,986
    )As of August 31, 2003
    
    $
    0
    
    
    $
    0
    
    
    $
    (121,463
    )
    
    $
    (27,002
    )Exchange of subordinated notes and
Series D preferred stock for Series E
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,016Issuance of Series F preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,000Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,579Reclassify preferred stock to
redeemable preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,296
    )Preferred dividends
    
    
    
    
    
    
    
    
    
    
    (2,237
    )
    
    
    (2,237
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (14,611
    )
    
    
    (14,611
    )As of August 31, 2004
    
    $
    0
    
    
    $
    0
    
    
    $
    (138,311
    )
    
    $
    (56,551
    )Conversion of Series E redeemable preferred
stock to shares of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,214Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    566Net loss
    
    
    
    
    
    
    
    
    
    
    (5,290
    )
    
    
    (5,290
    )As of August 31, 2005
    
    $
    0
    
    
    $
    0
    
    
    $
    (143,601
    )
    
    $
    (59,061
    )
  32




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##### Table of Contents



BULL RUN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended August 31,2005
    
    
    2004
    
    
    2003Cash flows from operating activities:Net loss
    
    $
    (5,290
    )
    
    $
    (14,611
    )
    
    $
    (37,986
    )Loss from discontinued operations
    
    
    149
    
    
    
    7,474
    
    
    
    9,542Adjustments to reconcile net loss to net cash used in continuing
operations:Provision for bad debts
    
    
    237
    
    
    
    75
    
    
    
    300Depreciation, amortization and intangibles impairment
    
    
    2,099
    
    
    
    6,871
    
    
    
    35,326Equity in (earnings) losses of affiliated companies
    
    
    
    
    
    
    
    
    
    
    204Loss on issuance of shares by affiliate
    
    
    
    
    
    
    
    
    
    
    2,339Dividends received from affiliated company
    
    
    
    
    
    
    
    
    
    
    162Other income derived from investment in affiliates, net
    
    
    
    
    
    
    
    
    
    
    (11,906
    )Net change in value of derivative instruments
    
    
    (412
    )
    
    
    (1,294
    )
    
    
    1,035Interest accrued on redeemable preferred stock
    
    
    2,017Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    5,222Change in operating assets and liabilities:Accounts receivable
    
    
    (5,665
    )
    
    
    2,317
    
    
    
    485Inventories
    
    
    (376
    )
    
    
    (286
    )
    
    
    622Prepaid costs and expenses
    
    
    718
    
    
    
    (611
    )
    
    
    (10
    )Accounts payable and accrued expenses
    
    
    1,624
    
    
    
    (3,770
    )
    
    
    2,588Other long-term assets and liabilities
    
    
    320
    
    
    
    (295
    )
    
    
    (1,092
    )Net cash provided by (used in) continuing operations
    
    
    (4,579
    )
    
    
    (4,130
    )
    
    
    6,831Net cash used in discontinued operations
    
    
    (1,558
    )
    
    
    (6,363
    )
    
    
    (11,918
    )Net cash used in operating activities
    
    
    (6,137
    )
    
    
    (10,493
    )
    
    
    (5,087
    )Cash flows from investing activities:Capital expenditures
    
    
    (195
    )
    
    
    (384
    )
    
    
    (230
    )Proceeds on dispositions of investments
    
    
    
    
    
    
    
    
    
    
    46,183Other investing activities
    
    
    (12
    )
    
    
    (149
    )
    
    
    (663
    )Net cash provided by (used in) continuing operation investing activities
    
    
    (207
    )
    
    
    (533
    )
    
    
    45,290Net cash provided by (used in) discontinued operation investing activities
    
    
    1,333
    
    
    
    447
    
    
    
    (117
    )Net cash provided by (used in) investing activities
    
    
    1,126
    
    
    
    (86
    )
    
    
    45,173Cash flows from financing activities:Borrowings on revolving line of credit
    
    
    3,000
    
    
    
    
    
    
    
    5,175Borrowings on note issued by related party
    
    
    1,500Cash advances made by stockholder
    
    
    1,500
    
    
    
    4,550Repayments on note payable and revolving line of credit
    
    
    (590
    )
    
    
    
    
    
    
    (5,000
    )Repayments on long-term debt
    
    
    
    
    
    
    
    
    
    
    (38,000
    )Debt issue costs
    
    
    (445
    )
    
    
    (41
    )
    
    
    (1,345
    )Preferred stock dividends
    
    
    (257
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    207Issuance of preferred stock
    
    
    
    
    
    
    2,000
    
    
    
    3,000Net cash provided by (used in) continuing operation financing activities
    
    
    4,708
    
    
    
    6,509
    
    
    
    (35,963
    )Net increase (decrease) in cash and cash equivalents
    
    
    (303
    )
    
    
    (4,070
    )
    
    
    4,123Cash and cash equivalents, beginning of period
    
    
    450
    
    
    
    4,520
    
    
    
    397Cash and cash equivalents, end of period
    
    $
    147
    
    
    $
    450
    
    
    $
    4,520
  33




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##### Table of Contents



BULL RUN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
  Proposed Merger of Bull Run into Triple Crown Media, Inc. 
  Discontinued Operations 
 34




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##### Table of Contents



2. LIQUIDITY
   3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation 
 Use of Estimates 
 35




---



##### Table of Contents



Revenue Recognition and Rights Fee Expenses 
  Barter Transactions 
 Cash and Cash Equivalents 
 Accounts Receivable and Credit Risk 
  36




---



##### Table of Contents



Inventories 
 Property and Equipment 
 Investment in Affiliated Companies 
  Goodwill and Other Long-Lived Assets 
  37




---



##### Table of Contents



Income Taxes 
 Valuation of Certain Non-Trade Receivables 
   Stock-Based Compensation 
 38




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##### Table of Contents



Year Ended August 31,2005
    
    
    2004
    
    
    2003Net loss available to common stockholders, as reported
    
    $
    (5,290
    )
    
    $
    (16,848
    )
    
    $
    (39,135
    )Deduct: Total stock-based employee compensation
expense determined under fair value-based method
for all awards
    
    
    (2
    )
    
    
    (367
    )
    
    
    (568
    )Net loss available to common stockholders, pro forma,
for computation of basic and diluted loss per share
    
    $
    (5,292
    )
    
    $
    (17,215
    )
    
    $
    (39,703
    )Loss per common share, basic and diluted:As reported
    
    $
    (0.81
    )
    
    $
    (3.61
    )
    
    $
    (9.82
    )Pro forma
    
    $
    (0.81
    )
    
    $
    (3.69
    )
    
    $
    (9.96
    )
  Derivative Instruments and Hedging Activities 
 Loss Per Share 
 39




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##### Table of Contents



4. DISCONTINUED OPERATIONS
   Accrued liability as of August 31, 2004
    
    $
    2,625Proceeds on sale of Events assets
    
    
    870Additional liability accrued during the fiscal year ended August 31, 2005
    
    
    160Costs incurred during the period
    
    
    (1,641
    )Accrued liability as of August 31, 2005
    
    $
    2,014
    40




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##### Table of Contents



August 31,2005
    
    
    2004Current liabilities:Accounts payable and accrued expenses
    
    $
    72
    
    
    $
    1,429Restructuring obligations
    
    
    585
    
    
    
    513Deferred revenue
    
    
    
    
    
    
    831Current assets:Accounts receivable, net
    
    
    (38
    )
    
    
    (2,163
    )Inventories
    
    
    
    
    
    
    (6
    )Prepaid costs and expenses
    
    
    
    
    
    
    (130
    )Net current liabilities of discontinued segment
    
    $
    619
    
    
    $
    474Noncurrent liabilities:Restructuring obligations
    
    $
    1,429
    
    
    $
    2,112Noncurrent assets:Note receivable, net
    
    
    (795
    )
    
    
    (1,245
    )Property and equipment, net
    
    
    (2
    )
    
    
    (12
    )Other assets
    
    
    (2
    )
    
    
    (15
    )Net noncurrent liabilities of discontinued segment
    
    $
    630
    
    
    $
    840
  Year Ended August 31,2005
    
    
    2004
    
    
    2003Revenues:Affinity Events
    
    $
    655
    
    
    $
    10,843
    
    
    $
    14,052Consulting
    
    
    
    
    
    
    
    
    
    
    5,664$
    655
    
    
    $
    10,843
    
    
    $
    19,716Costs and expenses:Affinity Events:Direct operating costs of services rendered
    
    $
    426
    
    
    $
    9,020
    
    
    $
    12,467Selling, general and administrative
    
    
    378
    
    
    
    9,297
    
    
    
    5,481Amortization and impairment of acquisition intangibles
    
    
    
    
    
    
    
    
    
    
    9,615$
    804
    
    
    $
    18,317
    
    
    $
    27,563Income (loss) from discontinued operations:Affinity Events
    
    $
    (149
    )
    
    $
    (7,474
    )
    
    $
    (3,896
    )Consulting
    
    
    
    
    
    
    
    
    
    
    5,664Datasouth
    
    
    
    
    
    
    
    
    
    
    (1,695
    )Amortization and impairment of acquisition intangibles
    
    
    
    
    
    
    
    
    
    
    (9,615
    )$
    (149
    )
    
    $
    (7,474
    )
    
    $
    (9,542
    )
 41




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##### Table of Contents



5. SUPPLEMENTAL CASH FLOW DISCLOSURES
 Year Ended August 31,2005
    
    
    2004
    
    
    2003Interest paid
    
    $
    4,504
    
    
    $
    4,365
    
    
    $
    8,271Income taxes paid, net
    
    
    0
    
    
    
    21
    
    
    
    61Noncash investing and financing activities:Conversion of Series E preferred stock to shares of common stock
    
    
    2,214
    
    
    
    0
    
    
    
    0Issuance of common stock in payment of preferred stock dividends
    
    
    0
    
    
    
    503
    
    
    
    571Exchange of subordinated debt for shares of Series E preferred stock
    
    
    0
    
    
    
    8,016
    
    
    
    1,783Issuance of common stock in connection with debt issuance costs
    
    
    499
    
    
    
    925
    
    
    
    1,349Issuance of common stock to a retirement plan and as a component
of directors fees
    
    
    67
    
    
    
    150
    
    
    
    297
 6. INVESTMENT IN AND TRANSACTIONS WITH AFFILIATED COMPANIES
  Investment in Gray and Gain on Issuance of Common Shares 
  Rights-Sharing Agreement with Gray 
 42




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##### Table of Contents



Investment in Rawlings 
 Investment in iHigh 
  43




---



##### Table of Contents



7. PROPERTY AND EQUIPMENT
  August 31,2005
    
    
    2004Land
    
    $
    448
    
    
    $
    448Building
    
    
    962
    
    
    
    962Leasehold and building improvements
    
    
    520
    
    
    
    555Machinery and equipment
    
    
    1,724
    
    
    
    1,404Office furniture and equipment
    
    
    2,911
    
    
    
    2,7556,565
    
    
    
    6,124Accumulated depreciation and amortization
    
    
    3,798
    
    
    
    2,940$
    2,767
    
    
    $
    3,184
  8. GOODWILL AND OTHER ACQUISITION INTANGIBLE ASSETS
  Collegiate
    
    
    
    
    
    
    
    
    
    
    DiscontinuedMarketing And
    
    
    Association
    
    
    
    
    
    
    Operation -Production
    
    
    Management
    
    
    
    
    
    
    AffinityServices
    
    
    Services
    
    
    Total
    
    
    EventsAs of September 1, 2002
    
    $
    58,232
    
    
    $
    6,475
    
    
    $
    64,707
    
    
    $
    2,450Impairment charge
    
    
    (21,043
    )
    
    
    
    
    
    
    (21,043
    )
    
    
    (2,450
    )As of August 31, 2003
    
    
    37,189
    
    
    
    6,475
    
    
    
    43,664
    
    
    
    0Impairment charge
    
    
    (3,300
    )
    
    
    
    
    
    
    (3,300
    )As of August 31, 2004
    
    
    33,889
    
    
    
    6,475
    
    
    
    40,364
    
    
    
    0As of August 31, 2005
    
    $
    33,889
    
    
    $
    6,475
    
    
    $
    40,364
    
    
    $
    0
  Collegiate
    
    
    
    
    
    
    
    
    
    
    DiscontinuedMarketing and
    
    
    Association
    
    
    
    
    
    
    Operation -Production
    
    
    Management
    
    
    
    
    
    
    AffinityServices
    
    
    Services
    
    
    Total
    
    
    EventsAs of September 1, 2002
    
    $
    8,263
    
    
    $
    2,397
    
    
    $
    10,660
    
    
    $
    6,339Adjustments
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    826Amortization
    
    
    (957
    )
    
    
    (141
    )
    
    
    (1,098
    )
    
    
    (118
    )Impairment charge
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    (7,047
    )As of August 31, 2003
    
    
    7,306
    
    
    
    2,256
    
    
    
    9,562
    
    
    
    0Amortization
    
    
    (1,113
    )
    
    
    (141
    )
    
    
    (1,254
    )As of August 31, 2004
    
    
    6,193
    
    
    
    2,115
    
    
    
    8,308
    
    
    
    0Amortization
    
    
    (576
    )
    
    
    (141
    )
    
    
    (717
    )As of August 31, 2005
    
    $
    5,617
    
    
    $
    1,974
    
    
    $
    7,591
    
    
    $
    0
 44




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##### Table of Contents



9. ACCRUED AND OTHER LIABILITIES
  2005
    
    
    2004Guaranteed rights fees and profit splits
    
    $
    1,843
    
    
    $
    2,160Accrued preferred stock dividends
    
    
    4,153
    
    
    
    2,393Interest
    
    
    716
    
    
    
    798Compensation and related costs
    
    
    444
    
    
    
    415Other accrued liabilities
    
    
    2,414
    
    
    
    3,449$
    9,570
    
    
    $
    9,215
  10. LONG-TERM DEBT AND NOTES PAYABLE
  August 31,2005
    
    
    2004Term Loans
    
    $
    35,932
    
    
    $
    35,932Revolvers
    
    
    23,000
    
    
    
    20,000Subordinated Notes
    
    
    10,193
    
    
    
    9,28369,125
    
    
    
    65,215Less current portion
    
    
    7,500
    
    
    
    590$
    61,625
    
    
    $
    64,625
  45




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46




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##### Table of Contents



11. INCOME TAXES
  47




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##### Table of Contents



Year Ended August 31,2005
    
    
    2004
    
    
    2003Federal statutory tax rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %Non-deductible goodwill amortization and impairment
    
    
    
    
    
    
    (15.7
    )
    
    
    (30.8
    )State income taxes, net of federal tax impact
    
    
    (0.6
    )
    
    
    2.5
    
    
    
    0.6Change in valuation allowance
    
    
    (30.2
    )
    
    
    (20.0
    )
    
    
    (26.0
    )Other, net
    
    
    (3.2
    )
    
    
    (0.8
    )
    
    
    (0.3
    )Effective tax rate
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    (22.5
    )%
     August 31,2005
    
    
    2004Property and equipment
    
    $
    2,752
    
    
    $
    2,278Acquisition intangible assets
    
    
    2,581
    
    
    
    2,825Gross deferred tax liabilities
    
    
    5,333
    
    
    
    5,103Allowance for doubtful accounts
    
    
    (113
    )
    
    
    (150
    )Investment in and advances to affiliates
    
    
    (395
    )
    
    
    (395
    )Valuation of derivative financial instruments
    
    
    
    
    
    
    (140
    )Reserves against nonoperating receivables
    
    
    (1,692
    )
    
    
    (1,720
    )Accrued expenses
    
    
    (833
    )
    
    
    (1,114
    )Nonqualified stock options outstanding
    
    
    (630
    )
    
    
    (779
    )Net operating loss carryforward
    
    
    (26,372
    )
    
    
    (23,908
    )Alternative Minimum Tax credit carryforward
    
    
    (490
    )
    
    
    (490
    )Business credit carryforward
    
    
    (116
    )
    
    
    (116
    )Gross deferred tax assets
    
    
    (30,641
    )
    
    
    (28,812
    )Less: valuation allowance
    
    
    25,308
    
    
    
    23,709Deferred tax assets, net of valuation allowance
    
    
    (5,333
    )
    
    
    (5,103
    )Total deferred tax liability (asset), net
    
    $
    0
    
    
    $
    0
 48




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12. PREFERRED STOCK
    49




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##### Table of Contents



13. STOCK OPTIONS
   50




---



##### Table of Contents



Option
    
    
    Option
    
    
    Exercisable
    
    
    OptionShares
    
    
    Price Range
    
    
    Shares
    
    
    Price RangeOutstanding as of September 1, 2002
    
    
    520
    
    
    $
    3.44 - $43.75
    
    
    
    388
    
    
    $
    3.44 - $43.75Grants
    
    
    12
    
    
    $
    5.70 - $5.80Exercised
    
    
    (60
    )
    
    $
    3.44Forfeited
    
    
    (118
    )
    
    $
    3.44 - $20.63Outstanding as of August 31, 2003
    
    
    354
    
    
    $
    3.44 - $43.75
    
    
    
    277
    
    
    $
    3.44 - $43.75Grants
    
    
    2
    
    
    $
    1.16Forfeited
    
    
    (35
    )
    
    $
    5.80 - $40.60Outstanding as of August 31, 2004
    
    
    321
    
    
    $
    1.16 - $43.75
    
    
    
    321
    
    
    $
    1.16 - $43.75Forfeited
    
    
    (45
    )
    
    $
    3.44 - $40.60Outstanding as of August 31, 2005
    
    
    276
    
    
    $
    1.16 - $43.75
    
    
    
    276
    
    
    $
    1.16 - $43.75
   14. FAIR VALUE OF FINANCIAL INSTRUMENTS
   15. RETIREMENT PLANS
  51




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16. COMMITMENTS AND CONTINGENCIES
  Payments Due by Period as of August 31, 2005Less Than
    
    
    More Than 1
    
    
    More Than 3
    
    
    More ThanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    to 3 Years
    
    
    to 5 Years
    
    
    5 YearsCapital lease obligations
    
    $
    182
    
    
    $
    80
    
    
    $
    102
    
    
    $
    
    
    
    $Operating lease obligations
    
    
    3,582
    
    
    
    1,137
    
    
    
    1,053
    
    
    
    945
    
    
    
    447Purchase obligations
    
    
    70,722
    
    
    
    16,591
    
    
    
    21,191
    
    
    
    9,478
    
    
    
    23,462Total
    
    $
    74,486
    
    
    $
    17,808
    
    
    $
    22,346
    
    
    $
    10,423
    
    
    $
    23,909
 Operating Leases 
 Purchase Obligations 
 Preferred Stock 
 52




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Legal
Matters 
   53




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##### Table of Contents



17. LOSS PER SHARE
  Year Ended August 31,2005
    
    
    2004
    
    
    2003Loss from continuing operations
    
    $
    (5,141
    )
    
    $
    (7,137
    )
    
    $
    (28,444
    )Preferred dividends
    
    
    
    
    
    
    (2,237
    )
    
    
    (1,149
    )Loss from continuing operations available to common stockholders
    
    
    (5,141
    )
    
    
    (9,374
    )
    
    
    (29,593
    )Loss from discontinued operations
    
    
    (149
    )
    
    
    (7,474
    )
    
    
    (9,542
    )Net loss available to common stockholders
    
    $
    (5,290
    )
    
    $
    (16,848
    )
    
    $
    (39,135
    )Weighted average number of common shares outstanding for
basic loss per share
    
    
    6,505
    
    
    
    4,668
    
    
    
    3,987Effect of weighted average dilutive convertible preferred stockEffect of accrued preferred dividends potentially payable in common stockEffect of dilutive employee stock optionsAdjusted weighted average number of common shares and
assumed conversions for diluted loss per share
    
    
    6,505
    
    
    
    4,668
    
    
    
    3,987Basic and diluted loss per share:Loss from continuing operations available to common stockholders
    
    
    (0.79
    )
    
    
    (2.01
    )
    
    
    (7.42
    )Loss from discontinued operations
    
    
    (0.02
    )
    
    
    (1.60
    )
    
    
    (2.40
    )Net loss available to common stockholders
    
    $
    (0.81
    )
    
    $
    (3.61
    )
    
    $
    (9.82
    )
 54




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##### Table of Contents



18. OTHER COMPREHENSIVE INCOME (LOSS)
  Year Ended August 31,2005
    
    
    2004
    
    
    2003Net loss
    
    $
    (5,290
    )
    
    $
    (14,611
    )
    
    $
    (37,986
    )Other comprehensive income (loss):Change in the valuation of available-for-sale investments
    
    
    
    
    
    
    
    
    
    
    2,050Comprehensive loss
    
    $
    (5,290
    )
    
    $
    (14,611
    )
    
    $
    (35,936
    )
  55




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##### Table of Contents



19. SEGMENT INFORMATION
   Year Ended August 31,2005
    
    
    2004
    
    
    2003Net revenues, continuing operations:Collegiate Marketing and Production Services
    
    $
    53,212
    
    
    $
    47,106
    
    
    $
    55,354Association Management Services
    
    
    8,667
    
    
    
    8,673
    
    
    
    8,775$
    61,879
    
    
    $
    55,779
    
    
    $
    64,129Operating income (loss), continuing operations:Collegiate Marketing and Production Services
    
    $
    2,275
    
    
    $
    977
    
    
    $
    930Association Management Services
    
    
    1,794
    
    
    
    2,009
    
    
    
    1,553Amortization and impairment of acquisition intangibles
    
    
    (718
    )
    
    
    (4,554
    )
    
    
    (22,141
    )Unallocated general and administrative costs
    
    
    (1,698
    )
    
    
    (1,126
    )
    
    
    (1,354
    )$
    1,653
    
    
    $
    (2,694
    )
    
    $
    (21,012
    )Depreciation expense, continuing operations:Collegiate Marketing and Production Services
    
    $
    559
    
    
    $
    786
    
    
    $
    923Association Management Services
    
    
    88
    
    
    
    97
    
    
    
    117Unallocated general and administrative costs
    
    
    5
    
    
    
    8
    
    
    
    8$
    652
    
    
    $
    891
    
    
    $
    1,048Capital expenditures, continuing operations:Collegiate Marketing and Production Services
    
    $
    86
    
    
    $
    360
    
    
    $
    264Association Management Services
    
    
    109
    
    
    
    21
    
    
    
    12Unallocated general and administrative costs
    
    
    
    
    
    
    3
    
    
    
    2$
    195
    
    
    $
    384
    
    
    $
    278
 2005
    
    
    2004Total assets:Collegiate Marketing and Production Services
    
    $
    15,637
    
    
    $
    11,634Association Management Services
    
    
    985
    
    
    
    697Goodwill, customer base and trademarks
    
    
    47,955
    
    
    
    48,672Other
    
    
    99
    
    
    
    (61
    )$
    64,676
    
    
    $
    60,942
 56




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##### Table of Contents



SUPPLEMENTARY DATA
 SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
 Quarter EndedNovember 30,
    
    
    February 28,
    
    
    May 31,
    
    
    August 31,2004
    
    
    2005
    
    
    2005
    
    
    2005Revenue from services rendered
    
    $
    23,075
    
    
    $
    18,034
    
    
    $
    12,949
    
    
    $
    7,821Operating income (loss)
    
    
    2,777
    
    
    
    551
    
    
    
    413
    
    
    
    (2,088
    )Income (loss) from continuing operations
    
    
    1,150
    
    
    
    (1,292
    )
    
    
    (1,481
    )
    
    
    (3,518
    )Income (loss) from discontinued operations
    
    
    (109
    )
    
    
    132
    
    
    
    (15
    )
    
    
    (157
    )Net income (loss) available to common stockholders
    
    
    1,041
    
    
    
    (1,160
    )
    
    
    (1,496
    )
    
    
    (3,675
    )Per share data, basic:Income (loss) available to common stockholders
from continuing operations
    
    $
    0.20
    
    
    $
    (0.20
    )
    
    $
    (0.22
    )
    
    $
    (0.51
    )Income (loss) from discontinued segment
    
    $
    (0.02
    )
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    (0.02
    )Net income (loss) available to common stockholders
    
    $
    0.18
    
    
    $
    (0.18
    )
    
    $
    (0.22
    )
    
    $
    (0.53
    )Per share data, diluted:Income (loss) available to common stockholders
from continuing operations
    
    $
    0.11
    
    
    $
    (0.20
    )
    
    $
    (0.22
    )
    
    $
    (0.51
    )Income (loss) from discontinued segment
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    (0.02
    )Net income (loss) available to common stockholders
    
    $
    0.10
    
    
    $
    (0.18
    )
    
    $
    (0.22
    )
    
    $
    (0.53
    )Weighted average number of shares,Basic
    
    
    5,713
    
    
    
    6,529
    
    
    
    6,887
    
    
    
    6,890Diluted
    
    
    15,278
    
    
    
    6,529
    
    
    
    6,887
    
    
    
    6,890
 Quarter EndedNovember 30,
    
    
    February 29,
    
    
    May 31,
    
    
    August 31,2003
    
    
    2004
    
    
    2004
    
    
    2004Revenue from services rendered
    
    $
    19,495
    
    
    $
    16,343
    
    
    $
    12,773
    
    
    $
    7,168Operating income (loss)
    
    
    1,816
    
    
    
    933
    
    
    
    (3,843
    )
    
    
    (1,600
    )Income (loss) from continuing operations
    
    
    751
    
    
    
    (244
    )
    
    
    (4,936
    )
    
    
    (2,708
    )Income (loss) from discontinued operations
    
    
    (1,873
    )
    
    
    (1,446
    )
    
    
    (1,400
    )
    
    
    (2,755
    )Net loss
    
    
    (1,122
    )
    
    
    (1,690
    )
    
    
    (6,336
    )
    
    
    (5,463
    )Preferred dividends
    
    
    (532
    )
    
    
    (558
    )
    
    
    (568
    )
    
    
    (579
    )Net loss available to common stockholders
    
    
    (1,654
    )
    
    
    (2,248
    )
    
    
    (6,904
    )
    
    
    (6,042
    )Per share data, basic and diluted:Loss available to common stockholders
from continuing operations
    
    $
    0.05
    
    
    $
    (0.18
    )
    
    $
    (1.15
    )
    
    $
    (0.65
    )Loss from discontinued segment
    
    $
    (0.43
    )
    
    $
    (0.32
    )
    
    $
    (0.29
    )
    
    $
    (0.55
    )Net loss available to common stockholders
    
    $
    (0.38
    )
    
    $
    (0.50
    )
    
    $
    (1.44
    )
    
    $
    (1.20
    )Weighted average number of shares,basic and diluted
    
    
    4,340
    
    
    
    4,500
    
    
    
    4,798
    
    
    
    5,034
 57




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
   Material Weakness in Internal Control Over Financial Reporting
  Remediation of Material Weakness
  58




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors and Executive Officers of the Registrant
     59




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##### Table of Contents



Audit Committee 
  60




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##### Table of Contents



Section 16(a) Beneficial Ownership Reporting Compliance 
  Code of Ethics 
 
 Item 11. Executive Compensation
  Summary Compensation Table
 Annual Compensation(a)
    
    (b)
    
    (c)
    
    
    (d)
    
    
    (i)Name and
    
    
    
    
    
    
    
    
    
    All OtherPrincipal
    
    
    
    
    
    
    
    
    
    Compen-Position
    
    Year
    
    Salary ($)
    
    
    Bonus ($)
    
    
    sation ($)Robert S. Prather, Jr.,
    
    2005
    
    $
    0
    
    
    $
    0
    
    
    $
    0President and Chief Executive
    
    2004
    
    $
    88,143
    
    
    $
    0
    
    
    $
    1,247
    (1)Officer of Bull Run
    
    2003
    
    $
    201,528
    
    
    $
    0
    
    
    $
    6,046
    (1)Frederick J. Erickson,
    
    2005
    
    $
    210,000
    
    
    $
    0
    
    
    $
    0Vice President  Finance
    
    2004
    
    $
    179,808
    
    
    $
    0
    
    
    $
    1,570
    (1)of Bull Run
    
    2003
    
    $
    166,807
    
    
    $
    0
    
    
    $
    5,004
    (1)
 
 (1)
    
    Consists of employer contributions to the defined contribution retirement plan. Compensation of Directors 
  61




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##### Table of Contents



Stock Options 
   Compensation Committee Interlocks and Insider Participation 
   62




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  Amount andNature of
    
    PercentName
    
    Beneficial Ownership
    
    of ClassJ. Mack Robinson
    
    4,059,297 (1)(2)(3)
    
    
    58.6
    %Harriett J. Robinson
    
    3,313,141 (1)(2)
    
    
    47.8
    %W. James Host
    
    480,315 (4)
    
    
    7.0
    %Hilton H. Howell, Jr.
    
    473,001 (5)
    
    
    6.9
    %Robert S. Prather, Jr.
    
    403,571 (1)(6)
    
    
    5.8
    %James W. Busby
    
    210,018 (7)
    
    
    3.0
    %Monte C. Johnson
    
    26,272 (8)
    
    
    *Frederick J. Erickson
    
    16,130 (9)
    
    
    *Gerald N. Agranoff
    
    6,500 (10)
    
    
    *All directors and executive officers as a group
    
    4,533,253 (11)
    
    
    64.4
    %
 
 *
    
    Less than 1%.(1)
    
    Includes 266,059 shares owned by Robinson-Prather Partnership. Robinson-Prather Partnership is a Georgia
general partnership, the general partners of which are Robert S. Prather, Jr., President, Chief Executive Officer,
and a director of Bull Run; J. Mack Robinson, Chairman of the board of directors of Bull Run; Harriett J. Robinson
(the wife of Mr. Robinson); Harriett J. Robinson, as trustee for Robin M. Robinson Trust; Harriett J. Robinson, as
trustee for Jill E. Robinson Trust and Gulf Capital Services, Ltd. The partnership agreement for Robinson-Prather
Partnership provides that Messrs. Prather and Robinson have the exclusive control of the day-to-day operations of
the partnership, including the power to vote or dispose of the shares of common stock owned by Robinson-Prather
Partnership. Each general partner disclaims beneficial ownership of the shares of common stock owned by
Robinson-Prather Partnership, except to the extent of his pecuniary interest in such shares of common stock, which
is less than the amount disclosed. The address for each of Robinson-Prather Partnership, Robin M. Robinson Trust,
Jill E. Robinson Trust and Gulf Capital Services, Ltd. is 4370 Peachtree Road, N.E., Atlanta, Georgia 30319.(2)
    
    Includes as to each of J. Mack Robinson and his wife, Harriett J. Robinson: (a) options issued to Mr. Robinson
to purchase 35,000 shares of Common Stock; (b) 3,110,811 shares owned directly by Mr. Robinson; (c) 66,210 shares
owned directly by Mrs. Robinson; and (d) an aggregate of 101,120 shares owned directly by the Robin M. Robinson
Trust and the Jill E. Robinson Trust, of each of which Mrs. Robinson is the trustee. Each of Mr. and Mrs.
Robinson disclaims beneficial ownership of the shares owned by the Robin M. Robinson Trust, the Jill E. Robinson
Trust and each other. Mr. and Mrs. Robinsons address is 4370 Peachtree Road, N.E., Atlanta, Georgia 30319.(3)
    
    Includes: (a) an aggregate of 416,573 shares owned by Delta Fire & Casualty Insurance Co., Delta Life
Insurance Company, Bankers Fidelity Life Insurance Co. and Georgia Casualty & Surety Co., Georgia corporations of
each of which Mr. Robinson is Chairman of the Board, President and/or principal stockholder (or the subsidiaries
of the same); (b) 44,324 shares 63




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##### Table of Contents



owned by Gulf Capital Services, Ltd., of which Mr. Robinson is a general partner;
and (c) 19,200 shares owned by the JMR Foundation, of which Mr. Robinson is trustee. Mr. Robinson disclaims
beneficial ownership of the shares owned by Delta Fire & Casualty Insurance Co., Delta Life Insurance Company,
Bankers Fidelity Life Insurance Co., and Georgia Casualty & Surety Co.(4)
    
    Mr. Hosts address is 2216 Savannah Lane, Lexington, KY 40513.(5)
    
    Includes: (a) options issued to Mr. Howell to purchase 7,500 shares of Common Stock; and (b) an aggregate of
416,573 shares owned by Delta Fire & Casualty Insurance Co., Delta Life Insurance Co., Bankers Fidelity Life
Insurance Co. and Georgia Casualty & Surety Co., Georgia corporations of each of which Mr. Howell is an executive
officer. Mr. Howell is married to Robin R. Howell, Mr. Robinsons daughter and a beneficiary of the Robin M.
Robinson Trust, which is a general partner of Robinson-Prather Partnership. Mr. Howell disclaims beneficial
ownership of the shares of Common Stock owned by Delta Fire & Casualty Insurance Co., Delta Life Insurance
Company, Bankers Fidelity Life Insurance Co., Georgia Casualty & Surety Co., Robinson-Prather Partnership and the
Robin M. Robinson Trust. Mr. Howells address is 4370 Peachtree Road, N.E., Atlanta, Georgia 30319.(6)
    
    Includes options issued to Mr. Prather to purchase 77,272 shares of Common Stock. Mr. Prathers address is
4370 Peachtree Road, N.E., Atlanta, Georgia 30319.(7)
    
    Includes: (a) options issued to Mr. Busby to purchase 3,000 shares of Common Stock; and (b) an aggregate of
702 shares owned by Mr. Busbys two children.(8)
    
    Includes options issued to Mr. Johnson to purchase 8,772 shares of Common Stock.(9)
    
    Includes options issued to Mr. Erickson to purchase 15,000 shares of Common Stock.(10)
    
    Includes options issued to Mr. Agranoff to purchase 4,000 shares of Common Stock.(11)
    
    Includes options issued to all directors and executive officers as a group to purchase an aggregate 150,544
shares of Common Stock. Equity Plan Compensation Information 
 As of August 31, 2005:
    
    (a)
    
    
    (b)
    
    
    (c)Number of securities
    
    
    Weighted-average
    
    
    Number of securities remainingto be issued upon exercise
    
    
    exercise price of
    
    
    available for future issuance underof outstanding options,
    
    
    outstanding options,
    
    
    equity compensation plans (excludingPlan Category
    
    warrants and rights
    
    
    warrants and rights
    
    
    securities reflected in column (a))Equity compensation plans
approved by security holders
    
    
    276,466
    
    
    
    $14.44
    
    
    
    0Equity compensation plans
not
approved by security holders
    
    
    0
    
    
    
    
    
    
    
    0Total
    
    
    276,466
    
    
    
    $14.44
    
    
    
    0
 64




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Item 13. Certain Relationships and Related Transactions
     65




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66




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Item 14. Principal Accountant Fees and Services
  2005
    
    
    2004Audit fees (1)
    
    $
    298,000
    
    
    $
    203,375Audit related fees (2)
    
    
    0
    
    
    
    0Tax fees (3)
    
    
    0
    
    
    
    0All other fees
    
    
    0
    
    
    
    0Total
    
    $
    298,000
    
    
    $
    203,375
 
 (1)
    
    For professional services in connection with the audits of our annual consolidated financial
statements included in our reports on Form 10-K, including quarterly reviews of our reports on Form
10-Q, and services related to statutory and regulatory filings or engagements, including $84,500 in
2005 for professional services rendered in connection with the proposed TCM merger and related
filings with the SEC, and assistance with a comment letter received from the SEC in 2005.(2)
    
    For professional services in connection with the annual audits of our employee benefit plan.
Note that Bull Run uses a firm other than PricewaterhouseCoopers LLP in connection with the audit
of its employee benefit plan.(3)
    
    For professional services related to tax consulting and tax planning. Note that Bull Run
utilizes a firm other than PricewaterhouseCoopers LLP in connection with the preparation and review
of federal, state and local tax returns  67




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PART IV
 
 Item 15. Exhibits and Financial Statements Schedules
 (a)
    
    List of documents filed as part of this report:
 (1)
    
    Financial Statements:
  
 (2)
    
    Financial statement schedule of Bull Run Corporation required to be filed by
Item 8 of this Form and by Item 15(c):
   68




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ExhibitNumbers
    
    Description(2.1
    )
    
    Restated Agreement and Plan of Merger, dated as of February 15,
1999, by and among Bull Run Corporation (formerly, BR Holding, Inc.), BR Holding,
Inc. (formerly, Bull Run Corporation), Capital Sports Properties, Inc., Host
Communications, Inc., Universal Sports America, Inc., Capital Merger Sub, Inc.,
Host Merger Sub, Inc., and USA Merger Sub, Inc. (g)(2.2
    )
    
    Form of Agreement and Plan of Merger, by and among Bull Run
Corporation (formerly, BR Holding, Inc.), BR Holding, Inc. (formerly, Bull Run
Corporation) and a wholly owned subsidiary of Bull Run Corporation (formerly, BR
Holding, Inc.) (g)(2.3
    )
    
    Agreement and Plan of merger by and among Triple Crown Media, Inc.,
BR Acquisition Corp. and Bull Run Corporation, dated as of August 2, 2005 (m)(2.4
    )
    
    Letter from Gray Television, Inc. to Bull Run Corporation, dated as of August 2, 2005 (m)(3.1
    )
    
    Articles of Incorporation of Bull Run Corporation (formerly, BR Holding, Inc.) (g)(3.2
    )
    
    Certificate of Amendment to Articles of Incorporation, filed November 9, 2001 (h)(3.3
    )
    
    Certificate of Amendment to Articles of Incorporation, filed February 12, 2002 (h)(3.4
    )
    
    Certificate of Amendment to Articles of Incorporation, filed November 8, 2002 (i)(3.5
    )
    
    Certificate of Amendment to Articles of Incorporation, filed May 13, 2003 (j)(3.6
    )
    
    Certificate of Amendment to Articles of Incorporation, filed May 30, 2003 (j)(3.7
    )
    
    Certificate of Amendment to Articles of Incorporation, filed October 8, 2003 (k)(3.8
    )
    
    Certificate of Amendment to Articles of Incorporation, filed November 26, 2003 (k)(3.9
    )
    
    Bylaws of Bull Run Corporation (formerly, BR Holding, Inc.) (g)(10.1
    )
    
    Amended and Restated 1994 Long Term Incentive Plan (g)(10.2
    )
    
    1987 Non-Qualified Stock Option Plan (a)(10.3
    )
    
    Non-Employee Directors 1994 Stock Option Plan (b)(10.4
    )
    
    Stock Purchase Agreement dated January 28, 1999 by and between U.S. Trust
Company of Florida Savings Bank, as Personal Representative of the Estate of Mary
Tarzian and Bull Run Corporation (e)(10.5
    )
    
    Form of Stockholders Agreement, by and among Hilton H. Howell, Jr., Douglas L.
Jarvie, Robinson-Prather Partnership, W. James Host and Charles L. Jarvie (g)(10.6
    )
    
    Third Amended and Restated Credit Agreement among BR Holding, Inc., Capital
Sports Properties, Inc., Host Communications, Inc. and Datasouth Computer
Corporation, as Borrowers, Bull Run Corporation, as a Guarantor, and Wachovia
Bank, National Association, as Issuing Bank, Wachovia Capital Markets, LLC, as
Sole Lead Arranger and Wachovia Bank, National Association, as Administrative
Agent, dated October 15, 2004 (l)(10.7
    )
    
    First Amendment to the Third Amended and Restated Credit Agreement among BR
Holding, Inc., Capital Sports Properties, Inc., Host Communications, Inc. and
Datasouth Computer Corporation, as Borrowers, Bull Run Corporation, as a
Guarantor, and Wachovia Bank, National Association, as Issuing Bank, Wachovia
Capital Markets, LLC, as Sole Lead Arranger and Wachovia Bank, National
Association, as Administrative Agent, dated October 14, 2005 (n)(14
    )
    
    Code of Ethics for Senior Financial Officers (k)(21
    )
    
    List of Subsidiaries of Registrant (x)(23.1
    )
    
    Consent of PricewaterhouseCoopers LLP (x)
 69




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##### Table of Contents



ExhibitNumbers
    
    Description(31.1
    )
    
    Certifications of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (x)(31.2
    )
    
    Certifications of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (x)(32.1
    )
    
    Certifications of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (x)(32.2
    )
    
    Certifications of Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (x)
 
 (a)
    
    Filed as an exhibit to Form 10-K Annual Report for the year ended December
31, 1988 and incorporated by reference herein(b)
    
    Filed as an exhibit to Registration Statement on Form S-4 (Registration No.
33-81816), effective November 3, 1994 and incorporated by reference herein(c)
    
    Filed as an exhibit to Form 10-KSB Annual Report for the year ended December
31, 1996 and incorporated by reference herein(d)
    
    Filed as an exhibit to Form 8-K Current Report dated as of November 21, 1997
and incorporated by reference herein(e)
    
    Filed as an exhibit to Form 8-K Current Report dated as of January 28, 1999
and incorporated by reference herein(f)
    
    Filed as an exhibit to Form 8-K Current Report dated as of April 23, 1999 and
incorporated by reference herein(g)
    
    Filed as an exhibit to Registration Statement on Form S-4 (Registration No.
333-84833), effective August 11, 1999 and incorporated by reference herein(h)
    
    Filed as an exhibit to Form 10-K Annual Report for the year ended June 30,
2002 and incorporated by reference herein(i)
    
    Filed as an exhibit to Form 10-Q Quarterly Report for the quarterly period
ended November 30, 2002 and incorporated by reference herein(j)
    
    Filed as an exhibit to Form 10-Q Quarterly Report for the quarterly period
ended May 31, 2003 and incorporated by reference herein(k)
    
    Filed as an exhibit to Form 10-K Annual Report for the year ended August 31,
2003 and incorporated by reference herein(l)
    
    Filed as an exhibit to Form 8-K Current Report dated as of October 15, 2004
and incorporated by reference herein(m)
    
    Filed as an exhibit to Form 8-K Current Report dated as of August 2, 2005 and
incorporated by reference herein(n)
    
    Filed as an exhibit to Form 8-K Current Report dated as of October 14, 2005
and incorporated by reference herein(x)
    
    Filed herewith (c)
    
    Financial Statement Schedules
The response to this section is submitted as part of Item 15(a)(1) and Item 15(a)(2).
 70




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SIGNATURES
  BULL RUN CORPORATIONby:
    /s/ ROBERT S. PRATHER, JR.Robert S. Prather, Jr.President and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ ROBERT S. PRATHER, JR.
Robert S. Prather, Jr.
    
    President, Chief Executive
Officer and Director
(Principal Executive
Officer)
    
    November 8, 2005/s/ GERALD N. AGRANOFF
Gerald N. Agranoff
    
    Director
    
    November 8, 2005/s/ JAMES W. BUSBY
James W. Busby
    
    Director
    
    November 8, 2005/s/ FREDERICK J. ERICKSON
Frederick J. Erickson
    
    Vice President-Finance and
Treasurer
(Principal Accounting and
Financial Officer)
    
    November 8, 2005/s/ HILTON H. HOWELL, JR.
Hilton H. Howell, Jr.
    
    Vice President, Secretary
and Director
    
    November 8, 2005/s/ MONTE C. JOHNSON
Monte C. Johnson
    
    Director
    
    November 8, 2005/s/ J. MACK ROBINSON
J. Mack Robinson
    
    Chairman of the Board
    
    November 8, 2005/s/ THOMAS J. STULTZ
Thomas J. Stultz
    
    Director
    
    November 8, 2005
 71




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULE
   
 72




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BULL RUN CORPORATION
 SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 AdditionsBalance at
    
    
    Charged to
    
    
    Charged to
    
    
    
    
    
    
    Balance atBeginning
    
    
    Costs and
    
    
    Other
    
    
    
    
    
    
    End ofDescription
    
    Of Period
    
    
    Expenses
    
    
    Accounts
    
    
    Deductions1
    
    
    PeriodYear Ended August 31, 2005Allowance for
doubtful accounts
    
    $
    309,000
    
    
    $
    237,000
    
    
    $
    0
    
    
    $
    244,000
    
    
    $
    302,000Year Ended August 31, 2004Allowance for
doubtful accounts
    
    $
    465,000
    
    
    $
    75,000
    
    
    $
    0
    
    
    $
    231,000
    
    
    $
    309,000Year Ended August 31, 2003Allowance for
doubtful accounts
    
    $
    514,000
    
    
    $
    300,000
    
    
    $
    0
    
    
    $
    349,000
    
    
    $
    465,000
 
 1
    
    Deductions represent write-offs of amounts not considered collectible. 73