U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB


  X    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
-----  ACT OF 1934

         For the quarterly period ended September 30, 1996

                                       OR

        TRANSITION REPORT UNDER 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
             (Exact name of registrant as specified in its charter)

       Georgia                                                    91-1117599
(State of incorporation                                       (I.R.S. Employer
      or organization)                                       Identification No.)

                  4370 Peachtree Road, N.E., Atlanta, GA 30319
                    (Address of principal executive offices)

                                 (404) 266-8333
                           (Issuer's telephone number)



Check whether issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable  date:  21,915,227 shares of Common Stock,
par value $.01 per share, were outstanding as of November 8, 1996.


<PAGE>



                          PART I. FINANCIAL INFORMATION

Item I.   Financial Statements

                              BULL RUN CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                              September 30,               December 31,
                                                                                  1996                        1995
                                ASSETS

   <S>                                                                        <C>                           <C>
   Current assets:
      Cash and cash equivalents............................................   $     166,854                 $    145,867
      Accounts receivable..................................................       4,912,035                    3,908,802
      Inventories..........................................................       3,288,158                    3,755,443
      Other................................................................         112,176                      184,793
                                                                                -----------                   ----------
           Total current assets............................................       8,479,223                    7,994,905
   Property and equipment, net.............................................       2,330,549                    2,511,686
   Investment in affiliated companies......................................      53,642,560                   29,246,010
   Goodwill................................................................       4,081,340                    4,313,783
   Other assets............................................................         307,810                      234,020
                                                                                -----------                   ----------

                                                                               $ 68,841,482                 $ 44,300,404
                                                                                 ==========                   ==========

      LIABILITIES AND STOCKHOLDERS' EQUITY

   Current liabilities:
      Note payable and current portion of long-term debt...................      $  500,000                 $  1,285,000
      Accounts payable.....................................................       1,860,319                    1,590,659
      Accrued and other liabilities:
         Employee compensation and related taxes...........................         464,424                      569,209
         Interest..........................................................         454,905                      101,125
         Income taxes......................................................         175,647                      393,227
         Other.............................................................         356,561                      316,986
                                                                                 ----------                  -----------
           Total current liabilities.......................................       3,811,856                    4,256,206
                                                                                 ----------                   ----------
   Long-term debt..........................................................      31,656,795                   14,895,600
                                                                                 ----------                   ----------
   Deferred income taxes...................................................       4,599,575                    1,069,732
                                                                                 ----------                   ----------

   Stockholders' equity:
      Common stock  ($.01  par  value,  authorized  100,000,000  shares;  issued
         22,309,727 shares as of September 30, 1996 and 22,279,727 shares
         as of December 31, 1995)..........................................         223,097                      222,797
      Additional paid-in capital...........................................      20,528,562                   20,502,612
      Retained earnings....................................................       8,935,468                    3,683,091
      Treasury stock, at cost (350,500 shares as of
         September 30, 1996 and 123,000 shares as of
         December 31, 1995)................................................        (913,871)                    (329,634)
                                                                                 -----------                  -----------
            Total stockholders' equity.....................................      28,773,256                   24,078,866
                                                                                 ----------                   ----------

                                                                               $ 68,841,482                 $ 44,300,404
                                                                                 ==========                   ==========
</TABLE>

      See accompanying notes to condensed consolidated financial statements.


<PAGE>



                              BULL RUN CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              AND RETAINED EARNINGS
                                   (Unaudited)

<TABLE>
<CAPTION> 
                                                                  Three Months Ended                    Nine Months Ended
                                                                      September 30                         September 30
                                                                      ------------                         ------------
                                                                 1996            1995                 1996              1995
                                                                 ----            ----                 ----              ----

<S>                                                          <C>              <C>                <C>               <C>         
 Revenue from printer operations........................     $ 5,987,676      $ 6,097,082        $ 17,842,461      $ 20,668,171
 Cost of goods sold.....................................       4,390,992        4,255,512          12,812,383        14,394,513
                                                               ---------        ---------          ----------        ----------
     Gross profit.......................................       1,596,684        1,841,570           5,030,078         6,273,658
                                                               ---------        ---------           ---------         ---------

 Other operating revenue:
     Consulting fees....................................         473,267                              841,615           435,000
     Royalties..........................................                           1,136                1,032             1,031
                                                               ---------      ----------           ----------        ----------
                                                                 473,267           1,136              842,647           436,031
                                                                 -------      ----------           ----------         ---------
 Operating expenses:
     Research and development...........................         349,227         498,931            1,186,226         1,407,169
     Selling, general and administrative................       1,164,095       1,024,165            3,586,503         3,704,250
                                                               ---------       ---------            ---------         ---------
                                                               1,513,322       1,523,096            4,772,729         5,111,419
                                                               ---------       ---------            ---------         ---------
 Income from operations.................................         556,629         319,610            1,099,996         1,598,270

 Other income (expense):
     Equity in earnings (losses) of affiliated
         companies......................................         962,478         (38,620)           1,672,286           181,433
     Gain on issuance of common shares by
         affiliated company.............................       8,178,678                            8,178,678
     Interest and dividend income.......................         205,167           1,713              598,954            33,265
     Interest expense...................................        (522,419)       (293,839)          (1,512,076)         (675,969)
                                                                ---------        --------           ----------        ----------
 Income before income taxes, cumulative effect of
         accounting change and extraordinary item.......       9,380,533         (11,136)          10,037,838         1,136,999

 Income tax benefit (provision).........................      (3,900,337)         38,095           (4,215,890)         (466,169)
                                                               ----------       --------            ----------        ----------
 Income before cumulative effect of accounting
         change and extraordinary item..................       5,480,196          26,959            5,821,948           670,830

 Cumulative effect of accounting change recognized
         by affiliate (net of $141,280 tax benefit).....                                             (274,248)
 Extraordinary loss recognized by affiliated
         company (net of $184,877 tax benefit) .........        (295,322)                            (295,322)         
                                                               -----------      ----------          -----------      ----------

 Net income.............................................       5,184,874          26,959            5,252,378           670,830

 Retained earnings, beginning of period.................       3,750,594       3,603,896            3,683,090         2,960,025
                                                               ---------       ---------            ---------         ---------
 Retained earnings, end of period.......................     $ 8,935,468     $ 3,630,855          $ 8,935,468       $ 3,630,855
                                                               =========       =========            =========         =========


 Earnings per share:
    Income before cumulative effect of accounting
        change and extraordinary item...................          $  .24          $  .00               $  .25            $  .03
    Cumulative effect of accounting change..............                                                 (.01)
    Extraordinary item..................................            (.01)            ___                 (.01)              ___
                                                                    ----                                 ----
    Net income..........................................          $  .23         $   .00               $  .23            $  .03
                                                                   =====           =====                =====             =====

 Weighted average number of common
       shares outstanding...............................      22,851,002     23,359,084            23,017,805        23,240,925

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>



                              BULL RUN CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                        Nine Months Ended September 30
                                                                                        ------------------------------
                                                                                           1996                  1995
                                                                                           ----                  ----
     <S>                                                                               <C>                  <C>            
 Cash flows from operating activities:
         Net income.............................................................       $ 5,252,378          $   670,830
         Adjustments to reconcile net income to net cash
                 provided by operating activities:
              Extraordinary loss................................................           480,199
              Cumulative effect of accounting change............................           415,528
              Gain on issuance of common shares by affiliate....................        (8,178,678)
              Depreciation and amortization.....................................           730,546              831,540
              Equity in earnings of affiliated companies........................        (1,672,286)            (181,433)
              Change in operating assets and liabilities:
                 Accounts receivable............................................        (1,003,233)             161,755
                 Inventories....................................................           467,285           (1,813,680)
                 Other current assets...........................................            72,616             (123,938)
                 Accounts payable and accrued expenses..........................           340,649              640,868
                 Deferred income taxes..........................................         3,529,843
                                                                                       -----------           ----------
              Net cash provided by operating activities.........................           434,847              185,942
                                                                                      ------------           ----------

 Cash flows from investing activities:
         Sale of marketable securities..........................................                                500,000
         Capital expenditures...................................................          (303,254)            (671,580)
         Investment in affiliated companies.....................................        (5,490,377)         (12,161,958)
         Note purchased from affiliated company.................................       (10,000,000)
         Dividends received from affiliated companies...........................            49,064               68,287
                                                                                      ------------         ------------
              Net cash used in investing activities.............................       (15,744,567)         (12,265,251)
                                                                                         ----------           ----------

 Cash flows from financing activities:
         Borrowings on revolving lines of credit................................         8,706,195            9,222,750
         Repayments on revolving lines of credit................................        (7,730,000)          (8,131,750)
         Proceeds from long-term debt...........................................        15,000,000           13,500,000
         Repayments on long-term debt...........................................                             (3,000,000)
         Loan commitment fees...................................................           (87,500)            (126,250)
         Repurchase of common stock.............................................          (584,238)            (207,134)
         Exercise of incentive stock options....................................            26,250               69,406
                                                                                      ------------         ------------
              Net cash provided by financing activities.........................        15,330,707           11,327,022
                                                                                        ----------           ----------

 Net increase (decrease) in cash and cash equivalents...........................            20,987             (752,287)
 Cash and cash equivalents, beginning of period.................................           145,867              824,207
                                                                                       -----------          -----------

 Cash and cash equivalents, end of period.......................................      $    166,854        $      71,920
                                                                                       ===========          ===========

 Supplemental cash flow disclosures:
         Interest paid..........................................................      $  1,586,614         $    404,310
         Income taxes paid......................................................           579,925              190,866

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>



                              BULL RUN CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. In management's  opinion, the accompanying  unaudited condensed  consolidated
financial  statements  reflect  all  adjustments  (consisting  solely of normal,
recurring  adjustments)  necessary to present fairly the financial  position and
results  of  operations  for  the  interim  periods  reported.  These  condensed
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial statements contained in the Annual Report on Form 10-KSB
of Bull Run Corporation for the year ended December 31, 1995.

2. The accompanying  condensed  consolidated  financial  statements  include the
accounts of Bull Run  Corporation  and its  wholly-owned  subsidiary,  Datasouth
Computer  Corporation  ("Datasouth",   and  collectively,   unless  the  context
otherwise requires,  the "Company"),  after elimination of intercompany accounts
and transactions.

3. The Company accounts for its investments in Gray Communication  Systems, Inc.
("Gray"), Host Communications,  Inc. ("HCI") and Capital Sports Properties, Inc.
("CSP")  using the equity  method.  The excess of the Company's  investments  in
Gray,  HCI and CSP over the underlying  equity  thereof is being  amortized over
forty years, with such amortization  (totaling $107,000 and $93,000 in the three
months  ended  September  30,  1996 and 1995,  respectively,  and  $320,000  and
$274,000 in the nine months  ended  September  30, 1996 and 1995,  respectively)
reported  as a  reduction  in the  Company's  equity  in  earnings  (losses)  of
affiliated companies.

         In September  1996,  Gray  consummated a public offering of 3.5 million
shares of its newly-issued  class B common stock at $20.50 per share,  resulting
in net  proceeds to Gray of  approximately  $67.1  million.  As a result of such
issuance,  the Company's  common equity ownership of Gray was reduced from 27.1%
to 15.2%,  resulting  in a pretax  gain for the  Company of  approximately  $8.2
million  (approximately  $5.0 million after tax). Such offering also reduced the
Company's  common  equity  voting  power in Gray from 27.1% to 25.1%.  Gray is a
Southeast United States communications  company that operates two NBC-affiliated
television stations, five CBS-affiliated  television stations (two of which were
acquired in September  1996),  three daily  newspapers,  two advertising  weekly
shoppers,  plus a satellite  broadcasting  operation and a paging business which
were also acquired in September 1996.

         The Company provides  consulting  services to Gray from time to time in
connection  with Gray's  acquisitions  and  acquisition  financing.  Income on a
portion of such fees is deferred and recognized  over forty years as a result of
the Company's  equity  investment  position in Gray. Due to the reduction in the
Company's equity  ownership of Gray as described  above,  $174,000 of previously
deferred consulting fees were recognized as consulting fee income in the quarter
ended September 30, 1996.

         In January 1996, the Company purchased an 8% Subordinated Note (the "8%
Note") of Gray in the principal  amount of $10.0  million,  on which the Company
received  interest  income of  $580,000  during  1996.  In  connection  with the
purchase of the 8% Note,  Gray issued to the Company  warrants to purchase up to
487,500 shares of Gray's class A common stock at $17.88 per share.  In September
1996,  the Company  exchanged  the 8% Note for 1,000  shares of Gray's  series A
preferred  stock,  which  entitles  the holder  thereof to cash  dividends at an
annual rate of $800 per share. At that same time, the Company purchased for $5.0
million,  500 shares of Gray's  series B preferred  stock  entitling  the holder
thereof to  cumulative  dividends  of $600 per share.  Dividends on the series B
preferred  stock  are  payable  in cash or in  additional  shares  of  series  B
preferred stock, at Gray's option. In connection with the Company's  acquisition
of series B preferred stock,  Gray issued to the Company warrants to purchase up
to 250,000  shares of Gray's  class A common  stock at $24.00 per share.  Of the
total warrants owned by the Company to purchase 737,500 shares of Gray's class A


<PAGE>



common stock,  450,000 are fully vested,  with the  remaining  warrants  vesting
periodically over five years. Such warrants are exercisable beginning in January
1998 and expire in 2006.

         In September 1996, Gray retired certain of its debt,  thereby incurring
an extraordinary loss of $3,159,000 (net of a tax benefit of $2,157,000) related
to deferred  financing costs associated with the retired debt. As a result,  the
Company has recognized 15.2% of Gray's charge as a $295,300  extraordinary loss,
net of the Company's own tax benefit of $184,900.

         On August 30,  1996,  CSP  exercised  warrants  to  acquire  HCI common
shares.  As a result,  the  Company's  direct  common  equity  ownership in HCI,
combined with the Company's  indirect common equity ownership in HCI through its
investment in CSP, increased from 8.9% to 29.9%. Additionally,  the Company owns
indirectly,  through  CSP,  51.5% of HCI's 8% series B preferred  stock having a
face value of $5  million.  HCI,  based in  Lexington,  Kentucky,  and its 33.8%
affiliate,  Universal Sports America, Inc. ("USA"),  provide media and marketing
services  to  universities,   athletic   conferences  and  various  associations
representing  collegiate  sports and, in  addition,  market and operate  amateur
participatory  sporting events.  The Company began accounting for its investment
in HCI and CSP under the equity  method in March 1995,  when it made its initial
investment in CSP.

         The Company recognizes its equity in earnings of HCI on a six month lag
basis,  in order to align HCI's  fiscal  year ending June 30 with the  Company's
fiscal year.  Effective  July 1, 1995 (the first day of HCI's 1996 fiscal year),
HCI adopted a new accounting  policy for the  recognition  of corporate  sponsor
license fee  revenue and  guaranteed  rights fee  expenses,  since the nature of
HCI's  contracts  were changing to include  revenue-sharing  or net profit split
arrangements,  rather than  guaranteed  rights fee  payments.  As a result,  the
rights fee expense associated with this type of contract could not be accurately
measured until the expiration of each contract  period when the  revenue-sharing
or net profit split  amount was  determined.  Under the new policy,  license fee
revenue and rights fee expense are recognized on a straight-line  basis over the
life of the  contract,  instead  of  recognizing  revenue  and  expense in their
entirety  on the  effective  date of the  contract,  thereby  providing  for the
uniform  matching of revenue and  expenses.  As a result of such  adoption,  HCI
recognized  a  $4.6  million   charge   against  its  first  quarter   earnings,
representing  the after-tax  cumulative  effect of the  accounting  change.  The
Company has reported 9.1% of such charge, or $415,000,  less a $141,000 deferred
tax benefit, as a charge against its first quarter 1996 earnings.

         In  September  1995,  HCI  sold  certain  of its  operations  to USA in
exchange for its 33.8% common equity  position.  The  transaction  resulted in a
gain, net of tax, of approximately  $4.0 million for HCI, the Company's share of
which amounted to $377,000,  as reflected in the Company's equity in earnings of
affiliated  companies for the nine months ended  September  30, 1996,  favorably
impacting the Company's net income for the period by approximately  $196,000, or
$.01 per share.

         Recognition of the impact of HCI's cumulative  effect of the accounting
change  and its gain on the sale of  assets  to USA  resulted  in the  Company's
filing of amended Form 10-QSB's for the  quarterly  periods ended March 31, 1996
and June 30, 1996 on Form 10-QSB/A-1 for each of such quarters.

         Assuming the CSP investment had occurred on January 1, 1995 and the HCI
accounting  change had been applied  retroactively in 1995, pro forma net income
and  earnings  per  share  would  have  been  approximately  $577,000  and $.02,
respectively,  for the  nine  months  ended  September  30,  1995,  compared  to
$5,527,000 and $.24, respectively, for the nine months ended September 30, 1996,
and  approximately  $30,000 and $.00,  respectively,  for the three months ended
September 30, 1995, compared to $5,185,000 and $.23, respectively, for the three
months ended September 30, 1996, after giving effect to pro forma adjustments to
the Company's equity in earnings of HCI, interest expense associated with the


<PAGE>


acquisition financing and the related income tax effects.

 Aggregate  operating results of affiliated  companies  (reflecting Gray and CSP
for the three months and nine months ended September 30, 1996 and 1995, combined
with HCI for the three months and nine months ended March 31, 1996 and 1995) are
as follows:

<TABLE>
<CAPTION>

                                               Three Months Ended        Three Months Ended
                                                September 30, 1996        September 30, 1995

<S>                                                <C>                        <C>        
 Operating revenue                                 $31,755,000                $26,785,000
 Income from operations                              4,603,000                  3,167,000
 Income before cumulative effect
    of accounting change and
    extraordinary item                               4,542,000                   716,000
 Net income                                          1,383,000                   716,000

</TABLE>

<TABLE>
<CAPTION>
                                                Nine Months Ended         Nine Months Ended
                                                September 30, 1996        September 30, 1995

<S>                                                 <C>                       <C>        
 Operating revenue                                  $79,257,000               $73,006,000
 Income from operations                              10,453,000                 9,148,000
 Income before cumulative effect
   of accounting change and
   extraordinary item                                9,647,000                  2,537,000
 Net income                                          1,929,000                  2,537,000
</TABLE>

4.        Inventories associated with Datasouth's printer manufacturing 
operations consist of the following:
                          September 30, 1996        December 31, 1995

 Raw materials                    $ 2,413,432          $ 2,489,539
 Work-in-process                      659,484              617,397
 Finished goods                       215,242              648,507
                                    ---------            ---------
                                  $ 3,288,158          $ 3,755,443
                                    =========            =========


5. In connection  with the purchase of the 8% Note and the acquisition of Gray's
series B preferred stock,  the Company  modified its Loan Agreement,  increasing
its outstanding  bank term loan borrowings by $10 million in January 1996 and by
an additional $5 million in September 1996.

          In September  1996,  the Company  extended one of its  revolving  bank
credit facilities to April 1998 and increased the available borrowings under the
facility to $2.0 million,  on which $1,498,795 had been borrowed as of September
30, 1996.  The Company has, in addition,  a bank credit  facility for  revolving
loans  of  up to  $3  million  through  April  1999,  on  which  $2,158,000  was
outstanding as of September 30, 1996.


6. The principal  differences  between the federal statutory tax rate of 34% and
the effective tax rates are nondeductible goodwill amortization and state income
taxes.


7. Earnings per share is based on the weighted  average number of shares of Bull
Run common stock and common stock equivalents (i.e., stock options)  outstanding
during the period, computed in accordance with the treasury stock method.


<PAGE>



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

Results of Operations

          Total revenue for the three months ended September 30, 1996, primarily
from the printer  manufacturing  operations  of Datasouth  Computer  Corporation
("Datasouth"),  a wholly-owned subsidiary of Bull Run Corporation (collectively,
with Datasouth,  unless the context  otherwise  requires,  the  "Company"),  was
$6,461,000,  compared to  $6,098,000  for the same period in 1995.  Gross profit
from printer  operations of 26.7% for the three months ended September 30, 1996,
decreased from the 30.2%  realized  during the same period in 1995 primarily due
to a different  mix of products  sold.  Total  revenue for the nine months ended
September  30, 1996  decreased to  $18,685,000,  from  $21,104,000  for the same
period in 1995.  Gross  profit  from  printer  operations  of 28.2% for the nine
months ended  September 30, 1996,  was less than the 30.4%  realized  during the
same  period in 1995  primarily  due to a  different  mix of  products  sold and
greater manufacturing overhead efficiencies gained in 1995 as a result of higher
unit volumes.

          Revenue from printer  operations  for the nine months ended  September
30, 1996 was lower than the same period in 1995, when the Company received large
orders from  several  key  customers.  Printer  sales to the  Company's  largest
customer were  approximately  $1.5 million for the three months and $5.2 million
for the nine months ended September 30, 1996, as compared to approximately  $1.7
million and $6.4 million for the same respective  periods in 1995. Also, printer
sales to a large distributor were lower by approximately  $200,000 for the three
months and $1.1 million for the nine months ended  September 30, 1996,  compared
to the 1995 periods,  due to a significant printer  installation  project by the
distributor's  customer  maturing in late 1995. Short term revenue trends in the
Company's printer business  fluctuate due to variable ordering patterns of these
and other  large  customers.  Despite  this  volatility,  revenue  from  printer
operations  has  been  relatively  consistent  over  the  past  five  successive
quarters.  In the second  quarter of 1996,  the Company  began  shipping two new
products,  a high  speed  version of the  Documax  dot  matrix  printer  and the
WinLiner,  a portable thermal printer.  Although the contribution from these new
products was not significant in the quarter just completed,  it is expected that
the Company  will  realize a gradually  increasing  contribution  from these new
products in the future.

          The  Company  provides  consulting  services  to  Gray  Communications
Systems,  Inc.  ("Gray") in connection with Gray's  acquisitions and acquisition
financing.  Income on a portion of such fees is  deferred  and  recognized  over
forty years as a result of the Company's equity investment position in Gray. Due
to the  reduction  in the  Company's  equity  investment  from 27.1% to 15.2% of
Gray's  outstanding  common  shares  (primarily  as a result  of  Gray's  public
offering of stock completed in September 1996 as described  below),  $174,000 of
previously  deferred fees was  recognized as consulting  fee income in September
1996. In addition,  the Company  invoiced  Gray for fees  totaling  $350,000 and
$850,000  during the three  months and nine months  ended  September  30,  1996,
respectively,  in connection with Gray's purchase of two television  stations, a
broadcasting operation and a paging business, of which $53,000 and $129,000 were
deferred,   respectively,  for  future  period  revenue  recognition.   Deferred
consulting  fees, which totaled $274,000 as of September 30, 1996, are currently
recognized  as income over forty  years.  Consulting  fee income of $435,000 was
recognized  during the nine  months  ended  September  30,  1995.  Except for an
additional  $350,000  to be  charged  to Gray for  services  to be  rendered  in
connection  with Gray's latest  acquisition,  there can be no assurance that the
Company will recognize any consulting fees in the future.

          Operating  expenses of $1,513,000  for the three months and $4,773,000
for  the  nine  months  ended  September  30,  1996  represented  a 1%  and a 7%
reduction,  respectively,  in comparison with the same periods last year, due to
reductions in certain project-specific


<PAGE>



research  and  development  expenses  and  certain  general  and  administrative
expenses.  Operating  expenses included  goodwill  amortization of approximately
$77,000 for each of the three month  periods and  $232,000  for each of the nine
month periods ended September 30, 1996 and 1995.

          Equity in earnings (losses) of affiliated companies, totaling $962,000
and  $(39,000)  for  the  three  months  ended  September  30,  1996  and  1995,
respectively,  included  the  Company's  proportionate  share of the earnings of
Gray, Host  Communications,  Inc.  ("HCI") and Capital Sports  Properties,  Inc.
("CSP"),  net of goodwill  amortization  totaling  $107,000  and $94,000 for the
respective  periods.   Equity  in  earnings  of  affiliated   companies  totaled
$1,672,000  and $181,000 for the nine months ended  September 30, 1996 and 1995,
respectively,  net of goodwill  amortization  totaling $320,000 and $274,000 for
the respective periods.

          In September 1996,  Gray  consummated a public offering of 3.5 million
shares of its newly-issued  class B common stock at $20.50 per share,  resulting
in net proceeds of  approximately  $67.1 million.  As a result of such issuance,
the Company's  common equity  ownership of Gray was reduced from 27.1% to 15.2%,
resulting  in a pretax  gain  for the  Company  of  approximately  $8.2  million
(approximately $5.0 million after tax). Such offering also reduced the Company's
common equity voting power in Gray from 27.1% to 25.1%. Although future sales by
Gray of its common stock would likely result in the  recognition  by the Company
of additional gains,  there is no assurance that such sales of a material nature
will occur in the  future.  Gray is a  Southeast  United  States  communications
company   that   operates   two   NBC-affiliated   television   stations,   five
CBS-affiliated  television  stations  (two of which were  acquired in  September
1996), three daily newspapers, two advertising weekly shoppers, plus a satellite
broadcasting  operation  and a paging  business  which  were  also  acquired  in
September 1996. In August 1996, Gray sold a television station for approximately
$9.5 million, recognizing a pretax gain of approximately $5.7 million.

          Interest  expense,  net of interest earned on an 8% Subordinated  Note
due from  Gray in the  principal  amount  of $10  million  (the "8%  Note")  and
dividends  accrued on the  Company's  investment in Gray's series A and series B
preferred  stock,  totaling  $317,000 and $913,000 for the three months and nine
months ended  September 30, 1996,  respectively,  was  attributable to bank term
loans and borrowings on the Company's revolving credit facilities.  Net interest
expense of $292,000  for the three months and $643,000 for the nine months ended
September  30, 1995 was  attributable  to the bank term loans  executed in March
1995,  a $3 million bank term loan (which was replaced by the 8% Note in January
1996),  and  short-term  borrowings  on lines of  credit  and  revolving  credit
facilities.

          The principal  differences  between the federal  statutory tax rate of
34% and the  effective  tax rates for each  period  are  nondeductible  goodwill
amortization and state income taxes.

          In September  1996,  Gray retired  certain debt with the proceeds from
its public  offerings  of class B common  stock and  notes,  and the sale of its
series B preferred stock. As a result,  Gray incurred an  extraordinary  loss of
$3,159,000  (net of a tax benefit of $2,157,000)  related to deferred  financing
costs associated with the retired debt. The Company  therefore  recognized 15.2%
of Gray's charge as an extraordinary loss, net of its own deferred tax benefit.

<PAGE>



Liquidity and Capital Resources

          In January 1996, the Company  purchased the 8% Note issued by Gray for
$10.0 million.  In September  1996, the Company  exchanged the 8% Note for 1,000
shares of Gray's series A preferred  stock,  which  entitles the Company to cash
dividends  at an annual rate of $800 per share.  At that same time,  the Company
acquired,  for $5.0  million,  500 shares of Gray's  series B  preferred  stock.
Dividends  on such  series B  preferred  stock are payable in cash (at an annual
rate of $600 per share) or, at Gray's option,  in additional  shares of series B
preferred  stock.  The  Company  anticipates  that  dividends  on the  series  B
preferred  stock  will  initially  be paid in  additional  shares  of  series  B
preferred stock.

          The  Company  modified  its  Loan  Agreement  in  connection  with the
purchase of the 8% Note and the acquisition of Gray's series B preferred  stock,
in order to increase its outstanding  bank term loan borrowings by $10.0 million
in January 1996 and an additional  $5.0 million in September 1996. The bank term
loans,  totaling  $28.5 million as of September 30, 1996, are payable in monthly
installments of $250,000 beginning February 1999, and currently bear interest at
the London Interbank  Offered Rate ("LIBOR"),  plus 1.75% (7.44% for the 120-day
period including September 30, 1996).

          In September  1996,  the Company  extended one of its  revolving  bank
credit facilities until April 1998 and increased the available  borrowings under
the facility to $2.0 million.  Borrowings under one such facility ($1,499,000 at
September  30,  1996)  bears  interest  at the bank's  prime  rate  (8.25% as of
September 30, 1996).  The Company also has a bank credit  facility for revolving
loans of up to $3.0 million through April 1999, bearing interest  principally at
LIBOR plus 2.25% (7.72% for the 30-day period including  September 30, 1996), on
which $2,158,000 was outstanding as of September 30, 1996. Although there exists
no  commitment  to  repay  any  amounts  outstanding  on  the  revolving  credit
facilities  during the next twelve months,  the Company  estimates the aggregate
amount  outstanding  on the  revolving  credit  facilities  will be  reduced  by
approximately  $500,000  during that period,  and  accordingly,  such amount was
recorded as a short-term obligation as of September 30, 1996.

          The Company's  total  working  capital of $4.7 million as of September
30, 1996  increased  from $3.7 million as of December  31, 1995,  primarily as a
result of  refinancing  a  short-term  bank line of credit with the $3.0 million
revolving credit facility.  In April 1996, the Company  announced that its Board
of Directors had  reauthorized  the  repurchase of up to 2 million shares of its
common  stock.  Repurchases  may be made from time to time in the open market or
directly from shareholders at prevailing market prices,  and may be discontinued
at any time.  During the nine months ended  September 30, 1996,  227,500  shares
were  repurchased at a total cost of $584,000,  and an additional  50,000 shares
were  repurchased  at a cost of $121,000  subsequent to September 30, 1996.  The
Company has  repurchased  a total of 400,500  shares at an average cost of $2.58
per share since the initial Board authorization in November 1994.

          The  Company  anticipates  that its  current  working  capital,  funds
available under its revolving credit facilities, quarterly cash dividends on the
Gray Series A preferred  stock and cash flow from  operations will be sufficient
to fund its debt service,  working  capital  requirements  and capital  spending
requirements  for at least the next  twelve  months.  Any capital  required  for
potential  additional  business  acquisitions would have to be funded by issuing
additional securities or by entering into other financial arrangements.



<PAGE>



PART II.   OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

          (a)     Exhibits
                      Exhibit 1 - Second Modification of Loan Agreement
                      Exhibit 2 - Computation of Earnings Per Share
                      Exhibit 3 - Financial Data Schedule

          (b)     Reports on Form 8-K
                      None



                                   SIGNATURES

Pursuant  to the  requirements  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.

                                          BULL RUN CORPORATION




Date:  November 12, 1996         By:      /s/ FREDERICK J. ERICKSON
                                          -------------------------
                                          Frederick J. Erickson
                                          Vice President-Finance, Treasurer
                                          and Assistant Secretary

                     (Mr. Erickson is the Chief Financial Officer and has
                     been duly authorized to sign on behalf of the registrant.)
<PAGE>