<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(MARK ONE)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

FOR THE TRANSITION PERIOD FROM____________________TO____________________________

                         COMMISSION FILE NUMBER 0-24377

                    CLEVELAND INDIANS BASEBALL COMPANY, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            OHIO                                       34-1861303
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

2401 ONTARIO STREET, CLEVELAND, OHIO                     44115
(Address of Principal Executive Offices)               (Zip Code)

Registrant's Telephone Number, Including Area Code 216-420-4200

Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report.

         Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X   No
                                             ---    ---

         The number of shares outstanding of each of the issuer's classes of
common stock, as of November 12, 1999 was as follows:

CLASS A COMMON SHARES                        4,141,976 SHARES
CLASS B COMMON SHARES                        2,283,957 SHARES


<PAGE>   2

                                     INDEX*

<TABLE>
<CAPTION>

                                                                                        PAGE
                                                                                        ----
<S>                                                                                      <C>
PART I.  FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS:

         a)   Unaudited Consolidated Balance Sheets as of September 30, 1999 and
              December 31, 1998                                                           3

         b)   Unaudited Consolidated Statements of Operations of Cleveland
              Indians Baseball Company, Inc. for the Three Months Ended
              September 30, 1999 and 1998                                                 4

         c)   Unaudited Consolidated Statements of Operations of Cleveland
              Indians Baseball Company, Inc. for the Nine Months Ended September
              30, 1999 and for the period from June 9, 1998 to September 30,
              1998 and the Combined Statement of Operations of Cleveland Indians
              Baseball Company Predecessor Group for the period from January 1,
              1998 to June 8, 1998                                                        5

         d)   Unaudited Condensed Consolidated Statements of Cash Flows of
              Cleveland Indians Baseball Company, Inc. for the Nine Months Ended
              September 30, 1999 and for the period from June 9, 1998 to
              September 30, 1998 and the Condensed Combined Statement of Cash
              Flows of Cleveland Indians Baseball Company Predecessor Group for
              the period from January 1, 1998 to June 8, 1998                             6

         e)   Notes to Unaudited Condensed Consolidated and Combined Financial
              Statements                                                                  7

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
              FINANCIAL CONDITION                                                        12

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                 22


PART II.      OTHER INFORMATION

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K                                           23

SIGNATURES                                                                               24
</TABLE>


* Items not listed are inapplicable


<PAGE>   3


PART I.  FINANCIAL INFORMATION

ITEM 1. - CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

                    CLEVELAND INDIANS BASEBALL COMPANY, INC.

                           CONSOLIDATED BALANCE SHEETS

                 (UNAUDITED AND IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>


                                                                                  SEPTEMBER 30,         DECEMBER 31,
                                                                                      1999                  1998
<S>                                                                                  <C>                  <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                                         $   30,497           $   39,283
   Marketable securities                                                                  7,465               13,287
   Investments                                                                               -                 3,783
   Receivables and accrued income                                                        21,806                9,421
   Merchandise inventories                                                                2,357                1,207
   Prepaid expenses and other current assets                                              2,447                2,969
   Deferred taxes                                                                           817                   -
   Deposit for grievance settlement                                                       8,743                9,589
                                                                                     ----------           ----------
       Total current assets                                                              74,132               79,539
                                                                                     ----------           ----------

FIXED ASSETS:
   Leasehold improvements, furniture and fixtures
     and other equipment, at cost                                                        11,506                8,969
   Less accumulated depreciation and amortization                                         4,304                3,387
                                                                                     ----------           ----------
       Total fixed assets, net                                                            7,202                5,582

PREPAID SIGNING BONUSES AND PLAYER
   CONTRACTS (Net of accumulated amortization)                                           10,805               10,590

INTANGIBLE ASSETS (Net of accumulated amortization)                                       9,785               10,383

DEFERRED TAXES                                                                            1,434                3,960

OTHER ASSETS                                                                             18,388               11,969
                                                                                     ----------           ----------

TOTAL                                                                                $  121,746           $  122,023
                                                                                     ==========           ==========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Accounts payable and accrued liabilities                                          $   15,454           $   10,961
   Deferred revenue                                                                      34,907               48,829
   Current portion of long-term debt                                                        449                  448
   Reserve for players' grievance damages                                                 8,743                9,589
   Income taxes payable                                                                      -                   750
                                                                                     ----------           ----------
       Total current liabilities                                                         59,553               70,577

LONG-TERM LIABILITIES                                                                    61,427               57,951

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (DEFICIT):
   Preferred shares, without par value; 1,000,000 shares
     authorized; no shares issued and outstanding                                            -                    -
   Class A Common Shares, without par value; 27,000,000 shares
     authorized; 4,139,476 shares issued and outstanding                                 55,802               55,800
   Class B Common Shares, without par value; 3,000,000 shares
     authorized; 2,283,957 shares issued and outstanding                                  5,125                5,125
   Additional paid in capital                                                             4,700                4,700
   Retained earnings (deficit)                                                          (64,861)             (72,130)
                                                                                     ----------           ----------
       Total shareholders' equity (deficit)                                                 766               (6,505)
                                                                                     ----------           ----------

TOTAL                                                                                $  121,746           $  122,023
                                                                                     ==========           ==========
</TABLE>


See notes to condensed consolidated and combined financial statements.


                                      -3-
<PAGE>   4

                    CLEVELAND INDIANS BASEBALL COMPANY, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                 (UNAUDITED AND IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                                           THREE MONTHS ENDED
                                                                                              SEPTEMBER 30,
                                                                                        1999                 1998
<S>                                                                                  <C>                  <C>
REVENUES:
   Net ticket sales                                                                  $   28,588           $   27,168
   Local radio and television                                                            10,992                9,069
   Concession and catering                                                                7,508                7,792
   Private suite and club seat rentals                                                    5,508                4,524
   Advertising and promotion                                                              6,104                4,767
   Merchandise                                                                            5,040                4,957
   Major Leagues Central Fund                                                             5,637                5,438
   Other (primarily Major League Baseball Properties)                                     1,263                1,126
   Post-season                                                                               -                 1,792
   Provision for revenue sharing                                                         (5,360)              (4,948)
                                                                                     ----------           ----------
       Total revenues                                                                    65,280               61,685
                                                                                     ----------           ----------

OPERATING EXPENSES:
   Major league team                                                                     38,232               29,049
   Player development                                                                     3,480                3,326
   Ballpark operations                                                                    5,073                4,807
   Cost of merchandise sold                                                               3,680                3,633
   Administrative and general                                                             2,765                2,074
   Major Leagues Central Fund                                                             1,921                1,543
   Advertising and promotion                                                              1,001                  792
   Post-season                                                                               -                 1,813
   Amortization of signing bonuses and player contracts                                   2,388                2,102
   Depreciation and amortization                                                            524                  777
                                                                                     ----------           ----------
       Total operating expenses                                                          59,064               49,916
                                                                                     ----------           ----------

OPERATING INCOME                                                                          6,216               11,769

OTHER INCOME (EXPENSE):
   Interest income                                                                          263                  536
   Interest expense                                                                        (603)                (783)
   Gain on player transactions                                                               20                   10
                                                                                     ----------           ----------

INCOME BEFORE MINORITY INTEREST AND INCOME
   TAX BENEFIT (PROVISION)                                                                5,896               11,532

MINORITY INTEREST                                                                        (2,889)              (5,650)

INCOME TAX BENEFIT (PROVISION)                                                            2,108               (2,700)
                                                                                     ----------           ----------

NET INCOME                                                                           $    5,115           $    3,182
                                                                                     ==========           ==========

NET INCOME PER SHARE:
   Basic                                                                             $     0.80           $     0.50
                                                                                     ==========           ==========
   Diluted                                                                           $     0.79           $     0.50
                                                                                     ==========           ==========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
   Basic                                                                              6,423,421            6,423,333
                                                                                      =========           ==========
   Diluted                                                                            6,459,493            6,423,333
                                                                                      =========           ==========

</TABLE>

See notes to condensed consolidated and combined financial statements.


                                      -4-
<PAGE>   5


                  CLEVELAND INDIANS BASEBALL COMPANY, INC. AND
              CLEVELAND INDIANS BASEBALL COMPANY PREDECESSOR GROUP

               CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

                 (UNAUDITED AND IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                                                                                                  THE
                                                                                                              PREDECESSOR
                                                                                   THE COMPANY                   GROUP
                                                                                   -----------                   -----
                                                                           NINE MONTHS        PERIOD            PERIOD
                                                                              ENDED         JUNE 9, TO        JANUARY 1,
                                                                          SEPTEMBER 30,    SEPTEMBER 30,      TO JUNE 8,
                                                                              1999             1998              1998
<S>                                                                        <C>               <C>              <C>
REVENUES:
   Net ticket sales                                                        $  59,617         $ 36,581         $  19,248
   Local radio and television                                                 21,578           10,889             7,317
   Concession and catering                                                    15,395           10,513             5,250
   Private suite and club seat rentals                                        11,223            6,162             3,160
   Advertising and promotion                                                  13,194            6,470             3,284
   Merchandise                                                                12,863            6,848             5,388
   Major Leagues Central Fund                                                 10,304            6,140             2,206
   Other (primarily Major League Baseball Properties)                          2,952            1,191             1,509
   Post-season                                                                    -             1,792                -
   Provision for revenue sharing                                             (10,985)          (6,409)           (3,041)
                                                                           ---------         --------         ---------
       Total revenues                                                        136,141           80,177            44,321
                                                                           ---------         --------         ---------

OPERATING EXPENSES:
   Major league team                                                          77,826           36,724            28,943
   Player development                                                         10,318            4,238             5,422
   Ballpark operations                                                        11,469            6,392             5,218
   Cost of merchandise sold                                                    9,336            4,683             4,072
   Administrative and general                                                  8,185            2,767             4,234
   Major Leagues Central Fund                                                  4,564            1,946             1,569
   Advertising and promotion                                                   3,474            1,057             1,784
   Post-season                                                                    -             1,813                -
   Amortization of signing bonuses and player contracts                        5,169            2,597             1,779
   Depreciation and amortization                                               1,494              898               778
                                                                           ---------         --------         ---------
       Total operating expenses                                              131,835           63,115            53,799
                                                                           ---------         --------         ---------

   OPERATING INCOME (LOSS)                                                     4,306           17,062            (9,478)

   OTHER INCOME (EXPENSE):
     Interest income:
       Affiliate                                                                  -                -                595
       Other                                                                   3,376              747             2,020
     Interest expense                                                         (1,730)            (952)           (1,191)
     Gain (loss) on player transactions                                           20               10            (1,604)
                                                                           ---------         --------         ----------

   INCOME (LOSS) BEFORE MINORITY INTEREST AND
     INCOME TAX BENEFIT (PROVISION)                                            5,972           16,867            (9,658)

   MINORITY INTEREST                                                          (2,926)          (8,265)               -

   INCOME TAX BENEFIT (PROVISION)                                              1,297           (3,615)               -
                                                                           ---------         --------         ---------

   NET INCOME (LOSS)                                                       $   4,343         $  4,987         $  (9,658)
                                                                           =========         ========         ==========

NET INCOME PER SHARE:
   Basic                                                                   $    0.68         $   0.78
                                                                           =========         ========
   Diluted                                                                 $    0.67         $   0.78
                                                                           =========         ========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
   Basic                                                                   6,423,362         6,423,333
                                                                           =========         =========
   Diluted                                                                 6,437,910         6,423,333
                                                                           =========         =========
</TABLE>


See notes to condensed consolidated and combined financial statements.

                                      -5-
<PAGE>   6

                  CLEVELAND INDIANS BASEBALL COMPANY, INC. AND
              CLEVELAND INDIANS BASEBALL COMPANY PREDECESSOR GROUP

          CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

                          (UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                                                  THE
                                                                                                              PREDECESSOR
                                                                                   THE COMPANY                   GROUP
                                                                                   -----------                   -----
                                                                           NINE MONTHS        PERIOD            PERIOD
                                                                              ENDED         JUNE 9, TO        JANUARY 1,
                                                                          SEPTEMBER 30,    SEPTEMBER 30,      TO JUNE 8,
                                                                              1999             1998              1998

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                             $  (6,863)        $ (1,222)            3,607
                                                                           ----------        ---------        ---------
<S>                                                                            <C>              <C>              <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
   Net change in short-term investments                                        3,783            5,624            14,300
   Purchases of marketable securities                                        (61,092)              -                 -
   Maturities of marketable securities                                        66,914               -                 -
   Purchase of long-term investments                                          (3,783)            (847)           (1,156)
   Proceeds from sale of player contracts                                        261              332               413
   Capital expenditures                                                       (2,559)            (524)           (1,062)
   Expenditures for the purchase of
     player contracts and signing bonuses                                     (5,449)          (3,271)           (4,007)
   Decrease in loan to general partner                                            -                -             35,500
   Acquisition of partnership interest                                            -           (55,800)              -
                                                                           ---------         --------         ---------
     Net cash provided by (used in) investing activities                      (1,925)         (54,486)           43,988
                                                                           ---------         --------         ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payment of debt issuance costs                                                 -                -               (192)
   Net proceeds from sale of common stock                                          2           55,800                -
   Distributions to general partner                                               -                 -           (49,200)
                                                                           ---------         --------         ---------
     Net cash provided by (used in) financing activities                           2           55,800           (49,392)
                                                                           ---------         --------         ---------


NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                                        (8,786)              92            (1,797)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                39,283            1,935             3,732
                                                                           ---------         --------         ---------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                   $  30,497         $  2,027         $   1,935
                                                                           =========         ========         =========
</TABLE>


See notes to condensed consolidated and combined financial statements.


                                      -6-
<PAGE>   7


                    CLEVELAND INDIANS BASEBALL COMPANY, INC.
            AND CLEVELAND INDIANS BASEBALL COMPANY PREDECESSOR GROUP

                  NOTES TO CONDENSED CONSOLIDATED AND COMBINED
                              FINANCIAL STATEMENTS

                 (UNAUDITED AND IN THOUSANDS, EXCEPT SHARE DATA)


1.       ORGANIZATION AND BASIS OF PRESENTATION

              Cleveland Indians Baseball Company, Inc., an Ohio corporation (the
         "Company"), was formed to acquire the 51% sole general partnership
         interest of, and controlling interest in, Cleveland Indians Baseball
         Company Limited Partnership, an Ohio limited partnership (the
         "Operating Partnership"). The Operating Partnership was formed to
         acquire, own, maintain, operate and control the membership of the
         Cleveland Indians Baseball Club (the "Indians") in The American League
         of Professional Baseball Clubs ("American League") and to operate and
         manage a baseball facility ("Jacobs Field") under a long-term
         management agreement with Gateway Economic Development Corporation of
         Greater Cleveland ("Gateway"). The historical financial information
         prior to June 9, 1998 includes the combined operations of Cleveland
         Indians Baseball Company Limited Partnership and Ballpark Management
         Company (collectively, the "Cleveland Indians Baseball Company
         Predecessor Group" or the "Predecessor Group").

              On June 9, 1998, the Company commenced operations after completing
         an initial public offering of 4,000,000 Class A Common Shares (the
         "Offering"). The 4,000,000 common shares were issued at a price per
         share of $15.00, generating gross proceeds of $60,000. The aggregate
         proceeds to the Company, net of underwriters' discount, were
         approximately $55,800. The Company utilized these net proceeds to
         purchase its 51% general partnership interest in the Operating
         Partnership and to engage in the other transactions described below.

              The following transactions occurred simultaneously with the
         completion of the Offering (collectively, the "Formation
         Transactions"):

         -    The Company issued and sold 133,233 Class A Common Shares to the
              original shareholders and Martin J. Cleary at a purchase price of
              $15.00 per share. The proceeds were used to pay the expenses of
              the Offering.

         -    The original shareholders and Martin J. Cleary contributed their
              interests in Ballpark Management Company ("Ballpark Management")
              and MJC Baseball, Inc. ("MJC") to the Company in exchange for
              6,043 Class A Common Shares and 2,283,957 Class B Common Shares
              valued at $5,125.

         -    The Company contributed to the Operating Partnership all of the
              assets, business, contract rights and liabilities held by Ballpark
              Management immediately prior to the mergers in exchange for
              partnership interests in the Operating Partnership.

         -    Upon completion of the contribution described above, the Company
              purchased additional general partnership interests from Cleveland
              Baseball Company ("CBC") with the net proceeds of the Offering.
              Upon completion of the purchase, the Company became the sole
              general partner of the Operating Partnership with a 51% interest
              in the Operating Partnership. Upon completion of the sale of
              partnership interests, CBC converted its remaining general
              partnership interest into a 49% limited partnership interest in
              the Operating Partnership.


                                      -7-
<PAGE>   8

              The Class A Common Shares are entitled to one vote per share and
         the Class B Common Shares are entitled to 10,000 votes per share.

              On May 13, 1999, the Company announced that its Board of Directors
         had engaged the Goldman Sachs Group, Inc. and McDonald Investments,
         Inc. to identify potential buyers for the franchise.

              The consolidated financial statements of the Company include all
         the accounts of the Company and its majority-owned Operating
         Partnership. The financial statements reflect the acquisition of the
         partnership interest at its historical basis of accounting as the
         acquired interest was from the Predecessor Group's owners who continue
         as investors. The accompanying combined financial statements for the
         Predecessor Group have been presented on a combined basis due to common
         ownership and management; therefore, its combined financial statements
         are presented for comparative purposes. All significant intercompany
         balances and transactions have been eliminated.

2.       INTERIM FINANCIAL STATEMENTS

              The accompanying interim financial statements are unaudited;
         however, the financial statements have been presented as permitted by
         Form 10-Q and do not include all of the disclosures required by
         generally accepted accounting principles for complete financial
         statements. In the opinion of management, all adjustments (consisting
         solely of normal recurring matters) necessary for a fair presentation
         of the financial statements for these interim periods have been
         included. The results of operations for the interim periods are not
         necessarily indicative of the results to be obtained for the full
         fiscal year. These financial statements should be read in conjunction
         with the Company's annual report on Form 10-K for its fiscal year ended
         December 31, 1998 and the consolidated financial statements and notes
         of the Company and the combined financial statements and notes of the
         Predecessor Group.

              The Company's operations are seasonal, commencing with spring
         training camp that opens in mid-February and ending with the conclusion
         of the Major League Baseball ("MLB") regular season in late September
         or early October. If the Indians qualify for post-season playoffs, the
         team can play until the end of October. For financial reporting
         purposes, the Company generally recognizes revenues and expenses on a
         per game basis. Because the regular season begins in late March or
         early April, the first fiscal quarter, which ends on March 31,
         generally includes limited revenues and reflects a loss attributable to
         fixed costs of operations during the quarter. Based on a typical MLB
         regular season, approximately one-half of the revenues are recognized
         in the second quarter and the remainder in the third quarter, excluding
         Major League Central Fund revenues. The number of home events
         scheduled, and ultimately played, in a given quarter will significantly
         influence quarterly financial results from year to year. Because of the
         scheduling of post-season playoffs in any given year, revenues and
         expenses associated with the post-season will be generally recognized
         in the third and fourth quarters, depending upon when actual games are
         played.


                                      -8-
<PAGE>   9

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              Revenue and Expense Recognition - Revenue from ticket sales, radio
         and television broadcasting and advertising and promotions generally
         are recorded at the time the game, to which such proceeds relate, is
         played. Major league team expenses, principally player compensation and
         game and post-season expenses, are recorded as expense generally on the
         same basis. Accordingly, advance ticket sales, payments on private
         suite and club seat rentals and payments for team and game expenses not
         earned or incurred are recorded as deferred revenues, prepaid signing
         bonuses and as a component of prepaid expenses and other. Such amounts
         are amortized ratably as regular season games are played.
         Administrative and general and advertising and promotional expenses are
         charged to operations as incurred.

              Marketable Securities - Marketable securities classified as
         current assets are comprised of bankers' acceptances and various debt
         securities. The Company has classified these marketable securities as
         available-for-sale. Available-for-sale securities are carried at fair
         value with unrealized gains and losses reported as a separate component
         of equity. Realized gains and losses are computed on the basis of
         specific identification and are included in interest income. The
         estimated fair value of marketable securities approximated cost at
         September 30, 1999. Marketable securities classified as other
         non-current assets acquired to assist in the funding of certain
         deferred compensation liabilities are classified as trading securities
         and, accordingly, are carried at fair value with unrealized gains and
         losses reported as current period income and expense.

              Minority Interest Allocation - Minority interest relates to the
         interest in the Operating Partnership that is not owned by the Company,
         which, at September 30, 1999, amounted to 49%. The deficit recorded by
         the Company as of the date of the Offering and related transactions
         include the deficit attributable to the minority interest. Earnings
         allocable to the minority interest, net of distributions and losses
         allocable to the minority interest, will be credited to retained
         earnings until the deficit is restored.

              Income Taxes - Income taxes are provided using the liability
         method in accordance with Statement of Financial Accounting Standards
         No. 109, "Accounting for Income Taxes." Deferred income taxes reflect
         the tax consequences in future periods of differences between the tax
         bases of assets and liabilities and their financial reporting amounts.
         A valuation allowance reduces deferred tax assets when management has
         determined it is "more likely than not" that some portion or all of the
         deferred tax assets will not be realized. The current deferred tax
         asset at September 30, 1999 in the amount of $817 has been recognized
         since management believes realization in future interim periods is
         "more likely than not."

              Earnings Per Share - Earnings per share is calculated based on the
         weighted average number of common shares outstanding. The assumed
         exercise of outstanding stock options, using the treasury stock method
         became dilutive in the third quarter of 1999. The dilutive shares also
         include stock grants to directors of the Company who have elected
         deferred payment in the form of Class A Common Shares related to the
         Directors' Deferred Compensation Plan.

              Comprehensive Income - For the three-month period ended September
         30, 1999 and nine-month period ended and as of September 30, 1999,
         there were no material differences between net income and comprehensive
         income.


                                      -9-
<PAGE>   10

              Reclassifications - Certain reclassifications have been made to
         the 1998 financial statements to conform with classifications used in
         1999.

4.       MAJOR LEAGUE BASEBALL REVOLVING CREDIT AGREEMENT

              In April 1998, the Company entered into a revolving credit
         facility ("facility") which replaced the previous agreement arranged by
         MLB and funded by a bank group. The terms of the facility require
         interest only payments through April 2001. Outstanding balances can be
         repaid in whole or in part in accordance with the facility. On April
         10, 2001, the facility may convert to a four-year term loan with
         principal repayments of 15%, 20%, 25% and 40% of the outstanding
         principal amount of all borrowings as of the termination date payable
         on January 10 of the first, second, third and fourth calendar years
         following the termination date, respectively. Accordingly, the
         outstanding balance of $35,500 at September 30, 1999 is reflected in
         long-term liabilities. Outstanding borrowings bear interest under the
         facility, based upon LIBOR plus .35%, at 5.38% and 5.51% at September
         30, 1999 and December 31, 1998, respectively.

5.       LONG-TERM INCENTIVE PLAN

              The Company has established a long-term incentive plan (stock
         option plan) for the purpose of retaining and rewarding key employees
         of the Company and its affiliates and members of the Board of Directors
         and to strengthen the mutuality of interest between such key employees
         and the Company's shareholders. In conjunction with the Offering, the
         Company granted options to purchase 294,350 Class A Common Shares to
         directors, officers and employees. All options were issued at an
         exercise price of $15.00, the initial public offering price per share.
         The options vest in three equal annual increments beginning one year
         after the date of grant and will expire ten years after the date of
         grant. On June 4, 1999, options to purchase 87,083 common shares
         vested.

              Since the Offering, options to purchase 48,550 common shares were
         forfeited. As of September 30, 1999, options to purchase 245,700 common
         shares were outstanding. During the third quarter of 1999, stock
         options to acquire 100 shares were exercised. An additional 454,200
         common shares are reserved for issuance under the Company's long-term
         incentive plan.


                                      -10-
<PAGE>   11

6.       EARNINGS PER SHARE DATA

              The following table sets forth the computation of basic and
         diluted earnings per share for the periods indicated:
<TABLE>
<CAPTION>

                                                                    (In thousands, except share data)
                                                            Three Months Ended         Nine Months      Period
                                                               September 30,              Ended       June 9, to
                                                       --------------------------     September 30,  September 30,
                                                           1999           1998            1999           1998
                                                       -----------     -----------    -----------    -----------
<S>                                                    <C>             <C>            <C>            <C>
              Basic:
                Net income                             $     5,115     $     3,182    $     4,343    $     4,987
                Average shares outstanding               6,423,421       6,423,333      6,423,362      6,423,333
                                                       -----------     -----------    -----------    -----------
                Basic EPS                              $      0.80     $      0.50     $     0.68    $      0.78
                                                       ===========     ===========    ===========    ===========

              Diluted:
                Net income                             $     5,115     $     3,182    $     4,343    $     4,987
                                                       -----------     -----------    -----------    -----------
                Average shares outstanding               6,423,421       6,423,333      6,423,362      6,423,333
                Net effect of dilutive stock options -
                 based on the treasury stock method         31,215              -          10,405             -
                Board grants                                 4,857              -           4,143             -
                                                       -----------     -----------    -----------    -----------
                Totals                                   6,459,493       6,423,333      6,437,910      6,423,333
                                                       -----------     -----------    -----------    -----------
                Diluted EPS                            $      0.79     $      0.50     $     0.67    $      0.78
                                                       ===========     ===========    ===========    ===========
</TABLE>

7.       SUBSEQUENT EVENT

              On November 4, 1999, the Company announced that it has signed a
         definitive agreement to sell the franchise to Lawrence J. Dolan and
         family trusts.

                                      -11-
<PAGE>   12


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

The following discussion should be read in conjunction with the financial
statements and related notes appearing elsewhere in this report.

OVERVIEW

     Portions of Management's Discussion and Analysis of Results of Operations
and Financial Condition include "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. The words "believe,"
"expect," "anticipate," "project," and similar expressions, among others,
identify "forward-looking statements," which speak only as of the date the
statement was made. Such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to materially
differ from those made, projected or implied in such statements. The most
significant such risks, uncertainties and other factors are:
- The control of the Company by Richard E. Jacobs
- The limited potential for further revenue growth
- The Company's dependence on the competitive success of the baseball club
- The uncertainties relating to increases in players' salaries
- Risks of labor difficulties
- A decline in the popularity of baseball
- The concentration of the Company's operations in one business

      These and other risks, uncertainties and other factors are more fully
described in the "Risk Factors" section of the final Prospectus dated June 4,
1998 relating to the Company's initial public offering. The Company undertakes
no obligation to publicly update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.

      Cleveland Indians Baseball Company, Inc. ("CIBC" or the "Company") was
formed to acquire the sole general partnership interest of, and controlling
interest in, the Partnership. The historical financial information prior to June
9, 1998 includes the combined operations of Cleveland Indians Baseball Company
Limited Partnership (CIBC, LP) and Ballpark Management Company (collectively,
the "Cleveland Indians Baseball Company Predecessor Group" or "Predecessor
Group"). CIBC commenced operations on June 9, 1998 after completing an initial
public offering of 4,000,000 Class A Common Shares.

      The Company recognizes a majority of its revenues as home games are played
(i.e., net ticket sales, concessions and catering, private suite and club
rentals and merchandise), and the most significant expense, major league team
salaries, is recognized over the entire regular season.

      The Company derives substantially all of its revenues from:
-   Sales of tickets to home games
-   Contracts with local broadcast organizations
-   Food and beverage concession sales
-   Premium seating rents
-   Advertising and promotional sales
-   Merchandise sales and royalties
-   Participation in the Major Leagues Central Fund ("MLCF")
-   Parking and ancillary baseball related revenues


                                      -12-
<PAGE>   13


     If the Indians qualify for post-season play, incremental revenues are
earned from similar sources.

     The Company's operations are seasonal, commencing with spring training camp
that opens in mid-February and ending with the conclusion of the MLB regular
season in late September or early October. If the Indians qualify for the
post-season playoffs, the team can play until the end of October, the duration
of participation being contingent on continued winning at each level of
post-season play (the Division, League Championship and World Series). For
financial reporting purposes, the Company generally recognizes revenues and
expenses on a per game basis. Because the regular season begins in late March or
early April, the first fiscal quarter, which ends on March 31, generally
includes limited revenues and reflects a loss attributable to fixed costs of
operations during the quarter. Based on a typical MLB regular season schedule,
approximately one-half of the revenues are recognized in the second quarter and
the remainder in the third quarter, excluding MLCF revenues. The number of home
events scheduled, and ultimately played, in a given quarter will significantly
influence quarterly financial results from year to year. Because of scheduling
of post-season playoffs in any given year, revenue and expenses associated with
post-season will generally be recognized in the third and fourth quarters,
depending upon when actual games are played.

     The Company currently receives a substantial portion of its receipts from
the advance sale of regular season tickets during the months of November through
January and premium seating rents during the months of September through
December, prior to the commencement of the MLB regular season. Season tickets
and public single-game tickets are sold during this time period. In recent
years, Jacobs Field attendance during the regular season has approximated 3.5
million fans, of which approximately 2.2 million are represented by season
tickets.

     The Major League Baseball regular season schedule consists of 162 games, of
which 81 are scheduled to be played at home and 81 are scheduled to be played on
the road. The following table outlines the regular season games played during
1999 and 1998:
<TABLE>
<CAPTION>

                                       1999                                               1998
                    --------------------------------------------       --------------------------------------------
                       Home            Away            Total              Home            Away           Total
                    ------------    ------------    ------------       ------------    ------------   -------------
<S>                          <C>             <C>             <C>                <C>             <C>             <C>

First Quarter                 -               -               -                  -               1               1
Second Quarter               40              36              76                 41              38              79
Third Quarter                38              45              83                 40              42              82
Fourth Quarter                3               -               3                  -               -               -
                    ============    ============    ============       ============    ============   =============
  Total                      81              81             162                 81              81             162
                    ============    ============    ============       ============    ============   =============
</TABLE>

     There were 16 spring training home games and two exhibition games played
during 1999 compared to 13 spring training home games and two exhibition
games played during 1998. During the three-month period ended September 30,
1999, there were 38 regular season home games played versus 40 in the
three-month period ended September 30, 1998. During the nine-month period ended
September 30, 1999, there were 78 regular season home games played versus 81 in
the nine-month period ended September 30, 1998. In addition, there were no
post-season games played in the three-month period ended September 30, 1999
while there were two post-season home games played in the three-month period
ended September 30, 1998.


                                      -13-
<PAGE>   14


RESULTS OF OPERATIONS

     The following discussion compares the results from continuing operations of
the Company for the three-month and nine-month periods ended September 30, 1999
with the results of the Company for the three-month period ended September 30,
1998 and from continuing combined operations of the Company and the Predecessor
Group for the nine-month period ended September 30, 1998.

REVENUES

     Net ticket sales revenue is comprised of gross ticket revenues from regular
season home games, less City of Cleveland admissions tax and an American League
assessment, plus net revenues derived from spring training and exhibition games.
Net ticket sales revenue increased $1,420,000, or 5%, in the three-month period
ended September 30, 1999 and $3,788,000, or 7%, in the nine-month period ended
September 30, 1999 compared to the same periods in 1998 primarily due to a
10% increase in the average ticket price offset by a 5% and a 4% decrease in
paid attendance in the three-month period and in the nine-month period ended
September 30, 1999, respectively, compared to the same periods in 1998. Paid
attendance decreased as a result of two fewer regular season home events played
in the three-month period and three fewer regular season home events played in
the nine-month period ended September 30, 1999 compared to the same periods in
1998 due to scheduling.

     Local radio and television revenue is recognized as the regular season
games are played. Local radio and television revenue increased $1,923,000, or
21%, in the three-month period ended September 30, 1999 and $3,372,000, or 19%,
in the nine-month period ended September 30, 1999 compared to the same
periods in 1998. Local radio revenue increased $713,000 in the three-month
period ended September 30, 1999 as there was one additional game broadcast and
an increase in radio advertising rates and advertising volume compared to the
same periods in 1998. Local radio advertising revenue increased $1,125,000 due
to a 17% increase in radio advertising rates and volume even though there were
three fewer games broadcast in the nine-month period ended September 30, 1999.
Television revenues increased $1,210,000 in the three-month period ended
September 30, 1999 due to a 44% increase in rights fees and one additional
telecast and $2,247,000 in the nine-month period ended September 30, 1999 due to
the rights fees increase offset by three fewer telecasts due to scheduling
compared to the same periods in 1998.

     Concession and catering revenue is primarily derived from general food and
beverage concessions throughout Jacobs Field, including private suite and club
seat catering. Concession and catering revenue decreased approximately $284,000,
or 4%, in the three-month period and $368,000, or 2%, in the nine-month period
ended September 30, 1999 compared to the same periods in 1998. The decreases
were primarily attributable to two fewer home events played in the three-month
period 1999 and three fewer home events played in the nine-month period 1999
offset by increased consumer spending in the three-month period and nine-month
period ended September 30, 1999 compared to the same periods in 1998.


                                      -14-
<PAGE>   15

     Revenue from private suite and club seat rentals includes lease income from
the suites and club seats that are leased on four-year terms as well as single
game rentals of suites and Terrace Club memberships. Private suite and club seat
rental revenue is recognized as the home games are played and increased
$984,000, or 22%, in the three-month period ended September 30, 1999 and
$1,901,000, or 20%, in the nine-month period ended September 30, 1999
compared to the same periods in 1998. The increases were primarily attributable
to an $842,000 and $1,605,000 increase in rental revenues for the three-month
period and nine-month period ended September 30, 1999, respectively, compared
to the same periods in 1998 associated with the renewal of 62 suites and 461
club seats at higher rental rates. The remaining increase in rental income was
primarily from suites rented on a single game basis.

     Advertising and promotion revenue consists primarily of the sale of
advertising space throughout Jacobs Field, marketing and promotional activities
and licensing of the Club's name and logo. Advertising and promotion revenue
increased $1,337,000, or 28%, in the three-month period and $3,440,000 or 35%,
in the nine-month period ended September 30, 1999, compared to the same periods
in 1998. The increases were primarily due to an increase in ballpark advertising
signage primarily related to new signage behind homeplate commencing in 1999.

     Merchandise sales include all sales at the Indians team shops and Jacobs
Field. The $83,000, or 2%, increase in merchandise sales in the three-month
period ended September 30, 1999 is primarily attributable to increased game day
sales and the opening of two additional retail stores during the third quarter
offset by two fewer home events played. The $627,000, or 5%, increase for the
nine-month period ended September 30, 1999 compared to the same period in 1998
was primarily due to increased game day sales, the two additional retail stores
opened during the third quarter and to sales at the Winter Haven team shop
during 1999 spring training offset by playing three less regular season home
events. Beginning in 1999, the control of retail operations and, therefore, the
related revenues and expenses at the Winter Haven site was transferred to the
Company from the city of Winter Haven.

     Post-season revenue includes incremental revenues earned from net ticket
sales, local radio and television fees, food and beverage concession sales,
private suite rentals, Jacobs Field merchandise sales and League distributions
from post-season games. Prior year post-season revenue of $1,792,000 consisted
of two home post-season games played in September 1998 while the 1999
post-season began in October.

     The Major Leagues Central Fund was established by the Commissioner of Major
League Baseball to collect certain revenues and to pay certain expenses that
relate to the operations of Major League Baseball. The 30 major league baseball
teams generally share these revenues and expenses. The principal component of
MLCF revenues is the Cleveland Indians' share of national television and radio
broadcasting fees. Major Leagues Central Fund revenues increased $1,958,000, or
23%, in the nine-month period ended September 30, 1999 compared to the same
period in 1998. The increase is primarily attributable to an increase in Central
Fund revenue associated with contractual broadcasting fees and copyright
arbitration royalties pertaining to 1992 through 1997.

     Major League Baseball member clubs participate in a revenue sharing system.
Under the system, each club must contribute a percentage of its net local
revenue to a revenue sharing pool. Once the pool is accumulated, it is
redistributed to the clubs on a basis that disproportionately benefits clubs
with below average revenue. The Cleveland Indians have been a net payor under
the revenue sharing system since inception. Provision for revenue sharing
increased $412,000, or 8%, for the three-month period ended September 30, 1999
and $1,535,000 or 16%, for the nine-month period ended September 30, 1999
compared to the same periods in 1998. These increases were primarily
attributable to the increase in the revenue sharing tax rate from 16% in 1998 to
17% in 1999 and an increase in the Club's net local revenue as defined in the
Collective Bargaining Agreement.


                                      -15-
<PAGE>   16

OPERATING EXPENSES

     Major league team costs include salaries of players and coaches, the
payroll luxury tax, travel costs, spring training, equipment and medical costs.
These costs increased $9,183,000, or 32%, in the three-month period ended
September 30, 1999 and $12,159,000, or 19%, in the nine-month period ended
September 30, 1999 compared to the same periods in 1998. The increase for both
periods is primarily attributable to an increase in major league roster
salaries.

     Player development costs, which include scouting programs, minor league and
Latin America operations and other specialized development programs, increased
$154,000, or 5%, in the three-month period ended September 30, 1999 and
increased $658,000, or 7%, in the nine-month period ended September 30, 1999
compared to the same periods in 1998. The increase in both periods is primarily
due to increased medical costs, costs for a new development program in
Venezuela, equipment costs and other costs.

     The cost of merchandise sold increased $581,000, or 7%, in the nine-month
period ended September 30, 1999 compared to the same period in 1998. The
increase in cost of merchandise sold is consistent with the increase in
merchandise sales.

     Administrative and general expenses increased $691,000, or 33%, in the
three-month period ended September 30, 1999 and increased $1,184,000, or 17%, in
the nine-month period ended September 30, 1999 compared to the same periods in
1998. The increases are primarily due to contractual increases in front office
salaries, increased medical costs and franchise sale costs. In addition, the
nine-month period ended September 30, 1999 included an increase attributable to
operating as a public company beginning in the second quarter of 1998 and an
increase in pension expense.

     Major Leagues Central Fund expenses allocated to the Cleveland Indians
increased $378,000, or 24%, in the three-month period ended September 30, 1999
and increased $1,049,000, or 30%, in the nine-month period ended September 30,
1999 compared to the same periods in 1998. These increases were due to an
increase in the expenses associated with the administration of the Office of the
Commissioner of Major League Baseball.

     Advertising and promotion expenses increased $209,000, or 26%, in the
three-month period ended September 30, 1999 and increased $633,000, or 22%, in
the nine-month period ended September 30, 1999 compared to the same periods in
1998. The increase in both periods was primarily due to costs related to a 1999
advertising campaign.

     Post-season expenses include major league team expense, ballpark
operations, cost of merchandise sold at Jacobs Field, advertising and promotion
and general and administrative expenses related to the post-season games. Prior
year post-season expenses of $1,813,000 consisted of two home post-season games
played in September 1998.

     The amortization of signing bonuses and player contracts results from the
recognition of these expenses over the lives of the related player contracts and
the write-off of the net book value of the signing bonus and contract value of
player contracts disposed of, in transactions not involving a trade or sale.
These costs increased $286,000, or 14%, in the three-month period ended
September 30, 1999 and increased $793,000, or 18%, in the nine-month period
ended September 30, 1999 compared to the same periods in 1998 primarily due to
the amortization of increased costs associated with the acquisition and signing
of players.


                                      -16-
<PAGE>   17

     Depreciation and amortization includes depreciation on fixed assets and
amortization of the Club's membership in the American League and deferred lease
costs. Depreciation and amortization decreased $253,000, or 33%, in the
three-month period ended September 30, 1999 and decreased $182,000, or 11%, in
the nine-month period ended September 30, 1999 compared to the same periods in
1998 due largely to prior year write-offs in the third quarter.

OTHER INCOME AND EXPENSE

     Interest income includes earnings on cash equivalents, marketable
securities, securities purchased to assist in the funding of certain deferred
compensation liabilities and the loan to the general partner. Interest income
decreased $273,000, or 51%, for the three-month period ended September 30, 1999
compared to the same period in 1998 due to a $406,000 decline in value for the
three-month period ended September 30, 1999, on securities purchased to assist
in the funding of certain deferred compensation liabilities that were previously
offset against the increase in the deferred compensation liability by an
increase in interest on cash equivalents and marketable securities. For the
nine-month period ended September 30, 1999, interest income increased due to
higher average combined cash equivalents, marketable securities, and securities
purchased to assist in the funding of certain deferred compensation liabilities
balance offset by reduced interest income due to the repayment in March 1998,
of the Predecessor Group's $35,500,000 loan to the Partnership's general
partner.

     Interest expense is primarily interest incurred on the Major League
Baseball Revolving Credit Agreement. Interest expense decreased $180,000, or
23%, for the three-month period ended September 30, 1999 and $413,000, or 19%,
for the nine-month period ended September 30, 1999 compared to the same periods
in 1998. These decreases were primarily due to a decrease in the interest rate
related to the revolving credit facility.

     A loss on player transactions of $1,604,000 in the first quarter of 1998 is
comprised of approximately a $2,000,000 loss attributable to a February 1998
trade of one player partially offset by the sale of one player's contract to a
Japanese team resulting in a gain of $300,000.

     Minority interest represents the interest in the earnings of the
Partnership that was not purchased and is not owned by the Company. The minority
interest of $2,889,000 and $2,926,000 represents a 49% interest in the earnings
of the Company for the three-month period and for the nine-month period ended
September 30, 1999, respectively.

     The provision for income taxes was $2,700,000 and $3,615,000 for the
three-month period ended and for the nine-month period ended September 30, 1998,
respectively. For the three-month period ended and for the nine-month period
ended September 30, 1999, there was an income tax benefit of $2,108,000 and
$1,297,000, respectively. The provision for income taxes in 1998 represented the
estimated tax on the Company's earnings at the applicable income tax rates. The
tax benefit recognized in 1999 is due to the anticipated recovery of taxes
remitted in 1998 of approximately $3,200,000 due to the changes in estimates and
the finalization of the tax purchase price allocation in conjunction with the
Company's purchase of the 51% general partnership interest of CIBC, LP in June
of 1998. The changes in the estimates for the purchase price allocation are
primarily due to the lives over which certain assets will be amortized. This
benefit has been partially offset by the current utilization of the Company's
deferred tax assets.


                                      -17-
<PAGE>   18

LIQUIDITY AND CAPITAL RESOURCES

     The Company's principal source of cash historically has been cash provided
from operating activities. Operating activities utilized $6,863,000 for the
nine-month period ended September 30, 1999 compared to providing net cash of
$2,385,000 for the nine-month period ended September 30, 1998. The increase of
$9,248,000 in the use of cash by operating activities was primarily due to a
decrease in deferred revenues, taxes payable and accounts payable and accrued
liabilities and an increase in other assets.

      The Company's cash management strategy is to achieve favorable returns
commensurate with the short-term nature of the investments while maintaining
sufficient cash flows to meet its short-term and long-term requirements for
capital and acquisition of player contracts. All marketable securities
classified as current assets are available to support current operations or to
take advantage of other investment opportunities.

     Under the terms of the Major League Credit Facility, certain MLB clubs,
including the Cleveland Indians have the ability to obtain financing on a
revolving credit basis. The obligations under the Major League Credit Facility
are non-recourse to the Partnership, and the obligations to repay advances for
the benefit of the Partnership are secured by the rights of the Partnership to
receive revenues that are shared by various MLB clubs, including revenues from
the Major Leagues Central Fund and royalties from MLB Properties. In connection
with the Major League Credit Facility, the Indians have assigned their rights to
receive their share of revenues and royalties to the Indians Club Trust, a
bankruptcy remote entity. The terms of the facility require interest only
payments through April 2001. Outstanding balances can be repaid in whole or in
part in accordance with the facility. On April 10, 2001, the facility may
convert to a four-year term loan with principal repayments of 15%, 20%, 25% and
40% of the outstanding principal amount of all borrowings as of the termination
date payable on January 10 of the first, second, third and fourth calendar years
following the termination date, respectively. Accordingly, the outstanding
balance of $35,500,000 at September 30, 1999 is reflected in long-term
liabilities. The interest rate on the amounts borrowed on the facility is based
on LIBOR plus a program fee of 0.35% and is adjusted semiannually in April and
October. As of September 30, 1999, the interest rate was 5.38%. In October 1999,
the interest rate was adjusted and increased to 6.37%. During the term of the
facility, the Company pays interest only on the outstanding borrowings, in
addition to commitment and other fees. The facility also provides that upon the
expiration of the current Collective Bargaining Agreement, and until a new
agreement is entered into, the Indians will be required to maintain an interest
contingency reserve equal to nine months' interest expense at 2% above the
then-applicable borrowing rate.

     Until the first quarter of 1998, the Predecessor Group had historically
borrowed the full amount available to it under the Major League Credit Facility
and in-turn loaned the proceeds to CBC, the Partnership's general partner. In
March 1998, the Partnership distributed $49,200,000 to its partners and CBC
repaid its $35,500,000 debt due to the Partnership. These transactions had the
effect of allowing CBC to use cash generated by the Partnership to repay its
debt to the Partnership. The Major League Credit Facility currently provides the
Company with an aggregate availability of $45,000,000 of which $9,500,000 was
available as of September 30, 1999.


                                      -18-
<PAGE>   19

     The Company's ability to incur additional indebtedness is limited by
applicable provisions of the agreements that govern all MLB clubs, which limit
the amount of debt that may be secured by the assets of, or ownership interests
in, an MLB club and require that the parties to any secured loan that is
approved execute an agreement limiting the rights of the lenders and the club
under certain circumstances, including upon an event of default or foreclosure.
The consent of the MLB is also required prior to the issuance of any additional
debt or equity securities by the Company. In addition, MLB clubs may not incur
indebtedness in an amount in excess of two-thirds of the value of their assets
calculated in accordance with MLB rules.

     The Company has significant commitments under its contracts with players
and other personnel, aggregating approximately $159 million as of September 30,
1999, including approximately $63 million scheduled for payment in the remainder
of 1999 and 2000. The Company's commitments under all multi-year contracts and
some single-year contracts are guaranteed, even if the player's contract is
terminated or if the player is physically unable to perform due to death, injury
or illness. The Company's obligations under non-guaranteed single-year contracts
are payable if the player's contract is terminated for performance reasons or
due to disability resulting directly from injury sustained in the course and
within the scope of his employment, but are otherwise not guaranteed. The
Company carries life insurance to insure its obligations under the contracts for
the 25-man major league roster. As of October 31, 1999, the Company also carried
disability insurance in the aggregate amount of approximately $105 million for
players under multi-year contracts. The disability benefits are generally
payable after 90 days of a player's disability and are subject to specified
pre-existing conditions.


FINANCIAL CONDITION

     Cash and cash equivalents, marketable securities and investments at
September 30, 1999 were $37,962,000 compared to $56,353,000 at December 31,
1998. The decrease was primarily attributable to the seasonal operations of the
Company and the substantial cash and investment position at December 31, 1998
related to advance ticket sales in the fourth quarter of 1998 and corresponds
largely to the decrease in the deferred revenue balance. The majority of the
Company's expenditures occur during the regular season. A majority of the cash
and cash equivalents and marketable securities balance at September 30, 1999
consisted of receipts for post-season ticket sales which occurred primarily in
September.

     Receivables and accrued income at September 30, 1999 were $21,806,000
compared to $9,421,000 at December 31, 1998. The increase was primarily
attributable to the recording of $3,200,000 of tax refunds, billings for
sponsorship contracts and concessionaire and catering revenue that occur during
the season and are paid throughout the year based upon predetermined payment
schedules and accrued Central Fund proceeds and accrued television revenues
which are paid after the regular season.

     Prepaid signing bonuses and player contracts at September 30, 1999 were
$10,805,000 compared to $10,590,000 at December 31, 1998. The increase was
attributable to $5,412,000 of prepaid signing bonuses and acquisition costs
associated with the acquisition and signing of players offset by $5,197,000 of
amortization and write-offs during the nine-month period ended September 30,
1999.

     Other assets at September 30, 1999 were $18,388,000 compared to $11,969,000
at December 31, 1998. The increase was primarily attributable to the purchase of
certain investments and appreciation in existing investments held in trust to
assist in the funding of the Company's deferred compensation obligations.


                                      -19-
<PAGE>   20

     Accounts payable and accrued liabilities at September 30, 1999 were
$15,454,000 compared to $10,961,000 at December 31, 1998. The increase was
primarily attributable to a $1,453,000 increase in accounts payable and a
$3,174,000 increase in accrued expenses. The increase in payables and accrued
expenses are due to the normal operations during the regular season.

     The majority of the Company's current liabilities are deferred revenues
which decreased to $34,907,000 at September 30, 1999 compared to $48,829,000 at
December 31, 1998. Deferred revenues consist primarily of advanced ticket sales
and the Company satisfies this liability by playing its regular season games.
The deferred revenue balance at September 30, 1999 is affected by receipts for
post-season ticket sales which occurred primarily in September.

     Long-term liabilities at September 30, 1999 were $61,427,000 compared to
$57,951,000 at December 31, 1998. The increase was primarily attributable to
increases in deferred compensation obligations.


SIGNIFICANT EVENTS

      On May 13, 1999, the Company announced that its Board of Directors has
engaged the Goldman Sachs Group, Inc. and McDonald Investments, Inc. to identify
potential buyers for the franchise.

     On November 4, 1999, the Company announced that it has signed a definitive
agreement to sell the franchise to Lawrence J. Dolan and family trusts. The copy
of the press release making this announcement is filed as Exhibit 99.1 to this
report.


YEAR 2000 COMPLIANCE

     The Year 2000 issue is the result of many computer programs being written
using two digits rather than four digits to define a year. Such programs may
recognize a year containing "00" as the year 1900 rather than the year 2000.
This could result in equipment or system failures or miscalculations causing
disruptions of daily operations for some organizations.

     The Company has substantially completed the process of identifying and
modifying all significant hardware and software applications that will require
modification to ensure Year 2000 Compliance. Internal and external resources
have been used to make the required modifications and test Year 2000 Compliance.
In addition, the Company has substantially completed its communications with
external service providers to ensure that the providers are taking the
appropriate action to address Year 2000 issues. To date, the Company is not
aware of any third parties with a Year 2000 issue that would materially impact
the Company's results of operations, liquidity, or capital resources.

     Management of the Company believes it has an effective program in place to
resolve internal Year 2000 issues in a timely manner. Management of the Company
further believes that its most likely worst-case Year 2000 scenario would
involve problems with the systems of external parties rather than with the
Company's internal systems. However, there can be no assurance that the failure
of third parties to convert systems on which the Company's systems rely, or that
a conversion that is incompatible with the Company's systems, would not have a
material adverse effect on the Company's systems.


                                      -20-
<PAGE>   21

     To date, the Company has incurred approximately $150,000 on efforts
directed solely at Year 2000 Compliance and does not anticipate any further
significant spending on this issue. The total cost of the Year 2000 Compliance
project has been funded through operating cash flows, and in the opinion of
management will not have a material impact on the Company's business, operations
or financial condition.

     Based on the Company's assessment of the readiness of its own systems and
those of significant third parties, it has and will continue to develop
contingency plans that address critical functions such as ticketing and
merchandising. In the event additional information comes to the Company's
attention which would change its current assessment, it will consider the need
for additional contingency plans at that time. In addition, as the primary
operations of the Company will not begin until April of 2000, with the
commencement of the MLB regular season, the Company believes adequate time will
be available, if necessary, to ensure alternative plans can be developed,
assessed and implemented prior to the Year 2000 issue having any unforeseen
significant negative impact on most of its principal operations.



                                      -21-
<PAGE>   22

ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company measures its market risk, related to its holdings of financial
instruments based on changes in interest rates utilizing a sensitivity analysis.
The sensitivity analysis measures the potential loss in fair values, cash flows
and earnings based on a hypothetical 10% change (increase and decrease) in
interest rates. The Company used current market rates on its debt to perform
sensitivity analysis.

     The Company's primary interest rate exposures relate to its cash,
marketable securities, and variable rate debt. The potential loss in fair values
is based on an immediate change in the net present values of the Company's
interest rate sensitive exposures resulting from a 10% change in interest rates.
The potential loss in cash flows and earnings is based on the change in the net
interest income/expense over a one-year period due to an immediate 10% change in
rates. A hypothetical 10% change in interest rates does not have a material
impact on the fair values, cash flows or earnings of the Company.


                                      -22-
<PAGE>   23

PART II.  OTHER INFORMATION


Except to the extent noted below, the items required in Part II are
inapplicable, or if applicable, would be answered in the negative and have been
omitted.


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

(a)      Exhibits

      EXHIBIT
        NO.                              DESCRIPTION
        ---                              -----------

       10.1       Amendment to Employment Agreement between the Company and
                  John Hart

       10.2       Employment Agreement between the Company and Ken Stefanov

       27.1       Financial Data Schedule

       99.1       Company Press Release Dated November 4, 1999


(b)      Reports on Form 8-K

         None


                                      -23-
<PAGE>   24


SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

DATE:  November 15, 1999                    By: /s/ Kenneth E. Stefanov
                                                  -----------------------
                                                Kenneth E. Stefanov
                                                Vice President, Finance
                                                (principal financial officer and
                                                principal accounting officer)



                                      -24-