<PAGE>   1

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


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

         FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                                       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                                58-2458679
       (State of incorporation                      (I.R.S. Employer
          or organization)                         Identification No.)

                  4370 PEACHTREE ROAD, N.E., ATLANTA, GA 30319
               (Address of principal executive offices) (Zip Code)

                                 (404) 266-8333
              (Registrant's telephone number, including area code)



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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 35,788,152 shares of Common
Stock, par value $.01 per share, were outstanding as of April 30, 2001.


<PAGE>   2


                          PART I. FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS

                              BULL RUN CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                   MARCH 31,          JUNE 30,
                                                                      2001              2000
                                                                   ---------         ---------
<S>                                                                <C>               <C>
                                                                                     (RESTATED)
ASSETS
Current assets:
   Cash and cash equivalents                                       $     990         $     619
   Accounts receivable, net of allowance of $853 and $1,155
      as of March 31, 2001 and June 30, 2000, respectively            25,577            30,384
   Inventories                                                           735               648
   Prepaid costs and expenses                                          7,629             3,710
   Income taxes receivable                                             5,408             3,148
   Deferred income taxes                                               5,284             3,516
   Net assets of discontinued segment                                                    6,286
                                                                   ---------         ---------
         Total current assets                                         45,623            48,311
Property and equipment, net                                            6,835             6,868
Investment in affiliated companies                                    63,519            77,935
Goodwill                                                              58,647            64,506
Customer base and trademarks                                          25,352            23,836
Other assets                                                          16,421             2,714
Net noncurrent assets of discontinued segment                          2,853             4,385
                                                                   ---------         ---------
                                                                   $ 219,250         $ 228,555
                                                                   =========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt                               $ 109,265         $  10,000
   Accounts payable                                                    4,399             2,690
   Accrued and other liabilities                                      33,979            30,172
   Net liabilities of discontinued segment                                 9
                                                                   ---------         ---------
         Total current liabilities                                   147,652            42,862
Long-term debt                                                        19,184           122,794
Deferred income taxes                                                    652             3,924
Other liabilities                                                      4,160             3,268
Stockholders' equity:
   Common stock, $.01 par value (authorized 100,000 shares;
      issued 36,330 as of March 31, 2001 and 35,627 shares
      as of June 30, 2000)                                               363               356
   Additional paid-in capital                                         77,334            76,123
   Treasury stock, at cost (542 shares)                               (1,393)           (1,393)
   Retained earnings (accumulated deficit)                           (28,702)          (19,379)
                                                                   ---------         ---------
         Total stockholders' equity                                   47,602            55,707
                                                                   ---------         ---------
                                                                   $ 219,250         $ 228,555
                                                                   =========         =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       2
<PAGE>   3

                              BULL RUN CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                  (Amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                      MARCH 31,                    MARCH 31,
                                                              -----------------------       -----------------------
                                                                2001           2000           2001           2000
                                                              --------       --------       --------       --------
<S>                                                           <C>            <C>            <C>            <C>
                                                                            (RESTATED)                     (RESTATED)
Revenue from services rendered                                $ 35,645       $ 39,426       $ 95,533       $ 46,816
Operating costs and expenses:
   Direct operating costs for services rendered                 26,050         28,151         66,770         33,025
   Selling, general and administrative                          10,496          9,074         28,381         11,346
   Amortization of acquisition intangibles                       1,127          1,113          3,285          1,300
                                                              --------       --------       --------       --------
                                                                37,673         38,338         98,436         45,671
                                                              --------       --------       --------       --------
         Operating income (loss)                                (2,028)         1,088         (2,903)         1,145
Other income (expense):
   Equity in earnings (losses) of affiliated companies          (1,105)          (514)        (2,577)          (648)
   Gain on issuance of shares by affiliate                         181                           181          2,492
   Reduction in valuation of investment in affiliate            (1,837)                       (8,017)
   Net change in value of certain derivative instruments        (1,359)                        4,569
   Correction of purchase price allocation                                                                  (11,330)
   Interest and dividend income                                    144            244            646            699
   Interest expense                                             (2,715)        (2,817)        (8,953)        (5,791)
   Debt issue cost amortization                                   (557)          (415)        (1,810)          (529)
   Other income (expense), net                                     173            172          1,117            559
                                                              --------       --------       --------       --------
         Loss from continuing operations before income
           taxes and cumulative effect adjustment               (9,103)        (2,242)       (17,747)       (13,403)
Income tax benefit                                               2,842            307          5,123            354
                                                              --------       --------       --------       --------
         Loss from continuing operations before
             cumulative effect adjustment                       (6,261)        (1,935)       (12,624)       (13,049)
Cumulative effect of accounting change (net of tax
    benefit of $1,766)                                                                         3,160
                                                              --------       --------       --------       --------
         Loss from continuing operations                        (6,261)        (1,935)        (9,464)       (13,049)
Income (loss) from discontinued operations (net of
    tax benefit of $41 and tax provision of $306,
    respectively)                                                                (141)                          263
                                                              --------       --------       --------       --------
         Net loss                                             $ (6,261)      $ (2,076)      $ (9,464)      $(12,786)
                                                              ========       ========       ========       ========

Earnings (loss) per share:
   Basic and diluted:
    Loss from continuing operations before cumulative
       effect of accounting change                            $  (0.18)      $  (0.06)      $  (0.36)      $  (0.48)
    Cumulative effect of accounting change                        0.00           0.00           0.09           0.00
    Income (loss) from discontinued segment                       0.00          (0.00)          0.00           0.01
                                                              --------       --------       --------       --------
                                                              $  (0.18)      $  (0.06)      $  (0.27)      $  (0.47)
                                                              ========       ========       ========       ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4

                              BULL RUN CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                 NINE MONTHS ENDED MARCH 31,
                                                                                 ---------------------------
                                                                                    2001             2000
                                                                                  --------         --------
<S>                                                                               <C>              <C>
                                                                                                   (RESTATED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                          $ (9,464)        $(12,786)
Income from discontinued segment                                                                       (263)
Adjustments to reconcile net loss to net cash provided by
      (used in) continuing operations:
   Cumulative effect of accounting change                                           (3,160)
   Reduction in valuation of investment in affiliate                                 8,017
   Gain on issuance of shares by affiliate                                            (181)          (2,492)
   Net change in value of certain derivative instruments                            (4,569)
   Correction of purchase price allocation                                                           11,330
   Provision for bad debts                                                             638               57
   Depreciation and amortization                                                     6,325            2,421
   Equity in losses of affiliated companies                                          2,577              648
   Loss on disposition of assets                                                                         64
   Deferred income taxes                                                            (4,227)          (1,947)
   Accrued preferred stock dividend income                                             (79)
   Change in operating assets and liabilities:
      Accounts receivable                                                            3,013               70
      Inventories                                                                      (57)             (61)
      Prepaid costs and expenses                                                    (3,917)           2,630
      Accounts payable and accrued expenses                                          3,237            5,541
      Other long-term liabilities                                                    1,148               72
                                                                                  --------         --------
Net cash provided by (used in) continuing operations                                  (699)           5,284
Net cash provided by  discontinued operations                                        1,972              302
                                                                                  --------         --------
Net cash provided by (used in) operating activities                                  1,273            5,586
                                                                                  --------         --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                                                  (875)            (483)
Investment in affiliated companies                                                     (46)          (1,614)
Proceeds on sale of investments                                                      5,330              289
Acquisition of businesses                                                           (1,219)         (44,464)
Increase in other assets                                                              (204)             (60)
Dividends received from affiliated company                                             162              122
                                                                                  --------         --------
Net cash provided by (used in) continuing operation investing activities             3,148          (46,210)
Net cash provided by (used in) discontinued operation investing activities           2,067             (605)
                                                                                  --------         --------
Net cash provided by (used in) investing activities                                  5,215          (46,815)
                                                                                  --------         --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from revolving lines of credit                                           22,925           29,792
Repayments on revolving lines of credit and notes payable                          (18,450)         (36,088)
Borrowings from long-term debt                                                                       95,000
Repayments on long-term debt                                                       (10,000)         (47,165)
Debt issue costs                                                                      (596)          (1,154)
Exercise of stock options                                                                4              673
                                                                                  --------         --------
Net cash provided by (used in) financing activities                                 (6,117)          41,058
                                                                                  --------         --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   371             (171)
Cash and cash equivalents, beginning of period                                         619              323
                                                                                  --------         --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                          $    990         $    152
                                                                                  ========         ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5

                              BULL RUN CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                (Amounts in thousands, except per share amounts)


1.       BASIS OF PRESENTATION

In management's opinion, the accompanying unaudited condensed consolidated
financial statements, as restated, 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-K of Bull Run Corporation ("Bull Run") for the fiscal year ended June 30,
2000; however, this Annual Report will be amended as soon as practicable as a
result of the restatement of financial statements discussed in Note 2.

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

Unless otherwise indicated, amounts provided in these notes to the condensed
consolidated financial statements pertain to continuing operations and have been
restated where applicable to reflect the correction of the errors referred to in
Note 2. In addition to the restatement of financial statements discussed in Note
2, certain other amounts in the prior year condensed consolidated financial
statements pertaining to discontinued operations (see Note 4) have been
reclassified to conform to the current year presentation.


2.       RESTATEMENT OF FINANCIAL STATEMENTS

On December 17, 1999, Bull Run acquired the stock of Host Communications, Inc.
("Host"), Universal Sports America, Inc. ("USA") and Capital Sports Properties,
Inc. ("Capital") not previously owned, directly or indirectly, by Bull Run (the
"Host-USA Acquisition"). On July 1, 2000, USA was merged into Host. In April
2001, the Company became aware that the financial statements of USA prior to the
Host-USA Acquisition, and financial information prepared by USA, as of and
following the Host-USA Acquisition, contained errors resulting from the use of
incorrect methodology used for the accounting for prepaid costs and expenses and
sponsor contract receivables and deferred revenue associated with the Company's
(and USA's) Affinity Events business. The Company will restate its financial
statements for the fiscal year ended June 30, 2000 and for the quarters ended
September 30, 2000 and December 31, 2000 and file an amended Form 10-K and
amended Form 10-Q's for the respective periods as soon as practicable. The
accompanying unaudited condensed consolidated financial statements for prior
periods have been restated for the correction of such errors.

As a result of the errors in the financial statements of USA prior to the
Host-USA Acquisition, the Company has restated its results for the nine months
ended March 31, 2000 to include a charge of $11,330, reflecting the extent to
which USA's net tangible assets as of the date of the Host-USA Acquisition were
overstated.


                                       5
<PAGE>   6

A comparison of the Company's consolidated financial position and results of
operations prior to and following the restatement follows:

                                                             PREVIOUSLY
                                            RESTATED          REPORTED
                                           ---------         ----------
THREE MONTHS ENDED MARCH 31, 2000:
  Revenue from services rendered           $  39,426         $  39,426
  Operating income                             1,088             3,246
  Loss from continuing operations             (1,935)             (640)
  Net loss                                    (2,076)             (781)
  Earnings (loss) per share:
    Loss from continuing operations        $   (0.06)        $   (0.02)
    Net loss                               $   (0.06)        $   (0.02)

NINE MONTHS ENDED MARCH 31, 2000:
  Revenue from services rendered           $  46,816         $  46,816
  Operating income                             1,145             3,141
  Loss from continuing operations            (13,049)             (521)
  Net loss                                   (12,786)             (258)
  Earnings (loss) per share:
    Loss from continuing operations        $   (0.48)        $   (0.02)
    Net loss                               $   (0.47)        $   (0.01)

AS OF JUNE 30, 2000:
  Current assets                           $  48,311         $  61,466
  Total assets                               228,555           241,851
  Current liabilities                         42,862            42,245
  Stockholders' equity                        55,707            69,620

The accumulated deficit component of Stockholders' Equity previously reported as
of December 31, 2000 (i.e., the end of the prior fiscal quarter) increased by
$13,704 as a result of the restatement.


3.       HOST-USA ACQUISITION

Aggregate consideration (net of cash acquired) paid by Bull Run in the Host-USA
Acquisition was approximately $116,900, which included common stock (totaling
11,687 shares) and stock options (for a total of 2,819 shares of common stock)
valued at approximately $52,300, 8% subordinated notes having a face value of
approximately $18,600, cash (net of approximately $9,700 in cash acquired) of
$44,800 and transaction expenses of approximately $1,200.

Prior to the Host-USA Acquisition, the Company accounted for its investment in
Host and Capital under the equity method, and for its investment in USA under
the cost method. Beginning December 17, 1999, the financial results of Host, USA
and Capital have been consolidated with those of the Company. On July 1, 2000,
USA was merged into Host. The Host-USA Acquisition has been accounted for under
the purchase method of accounting, whereby the assets and liabilities of the
acquired businesses have been included as of December 17, 1999 based upon
estimated fair values at the date of acquisition. The excess of the purchase
price over assets acquired (i.e., goodwill) of approximately $62,900 is being
amortized on a straight-line basis over 20 years.


                                       6
<PAGE>   7

As a result of the anticipated reorganization of Host and USA, the Company
accrued as part of the allocation of the purchase price approximately $195 for
costs to close certain duplicative office facilities and accrued approximately
$1,500 in severance costs. The facility consolidation and employee terminations
resulted primarily from combining certain office facilities and duplicative
functions, including management functions, of Host and USA. Through March 31,
2001, the Company had charged approximately $1,224 (which consisted of cash
expenditures) against the reserve, and the accrual for future costs to be
incurred was approximately $471 as of March 31, 2001.

Pro forma operating results for the three months and nine months ended March 31,
2000, assuming the Host-USA Acquisition had been consummated as of July 1, 1999,
would have been as follows:

                                   THREE MONTHS ENDED  NINE MONTHS ENDED
                                     MARCH 31, 2000     MARCH 31, 2000
                                     --------------     --------------
                                       (RESTATED)         (RESTATED)

Net revenue                            $ 39,426          $ 104,029
Operating income (loss)                   1,219               (621)
Loss from continuing operations          (1,463)            (2,765)
Net loss                                 (1,604)            (2,502)

Net earnings (loss) per share:
   Basic                               $  (0.05)         $   (0.08)
   Diluted                             $  (0.05)         $   (0.08)

The pro forma income (loss) from operations includes amortization of acquisition
intangibles of $1,114 and $3,245 for the three months and nine months ended
March 31, 2000, respectively. These pro forma results are not necessarily
indicative of actual results that might have occurred if the operations and
management of the Company and the acquired companies had been combined in prior
years.


4.       DISCONTINUED OPERATION

On July 26, 2000, the Company's Board of Directors authorized management to sell
the operating assets of Datasouth, the Company's computer printer manufacturing
operation. The Company's decision to discontinue its Datasouth operations was
attributable to the strategic decision to focus on the sports, affinity
marketing and management businesses acquired on December 17, 1999 in the
Host-USA Acquisition. On September 29, 2000, the Company sold Datasouth's
inventories, property and equipment and intangible assets pertaining to the
business for cash and a note payable over two years. The Company retained the
receivables, accounts payable and certain accrued expenses of the Datasouth
business, and expects to liquidate substantially all of the remaining assets and
pay the outstanding liabilities by the end of the current fiscal year.
Accordingly, the operating results and net assets associated with Datasouth's
computer printer manufacturing business as of and for the three months and nine
months ended March 31, 2001 and all prior periods presented herein have been
reported as discontinued operations in the accompanying financial statements.

The estimated loss on the sale of Datasouth recorded for the fiscal year ended
June 30, 2000 (including a provision for estimated operating losses during the
disposal period) was combined with Datasouth's operating results and presented
as discontinued operations in the financial statements for the fiscal year ended
June 30, 2000. Management's estimate of operating losses during the expected
disposal period was based on management's estimate of the amounts for which the
remaining assets will be sold. Actual amounts ultimately realized on the
liquidation of remaining assets could differ materially from the amounts assumed
in arriving at the loss on



                                       7
<PAGE>   8

disposal. To the extent actual proceeds on the liquidation of remaining assets
differ from the estimates that are reported as of March 31, 2001, or as
management's estimates are revised, such differences will be reported as
discontinued operations in future periods.

Assets and liabilities of the discontinued operations have been reflected in the
consolidated balance sheets as current or noncurrent based on the original
classification of the accounts, except that current liabilities are presented
net of current assets and noncurrent assets are presented net of noncurrent
liabilities. As of June 30, 2000, net noncurrent assets included a valuation
allowance of $7,419 to recognize the estimated loss on disposal.

The following is a summary of assets and liabilities of discontinued operations:

<TABLE>
<CAPTION>
                                                               MARCH 31,        JUNE 30,
                                                                  2001            2000
                                                                -------         -------
<S>                                                             <C>             <C>
Current assets:
   Accounts receivable, net                                     $   248         $ 3,166
   Inventories                                                                    5,501
   Other current assets                                              17             328
Current liabilities:
   Accounts payable and accrued expenses                           (274)         (2,709)
                                                                -------         -------
Net current assets (liabilities) of discontinued segment        $    (9)        $ 6,286
                                                                =======         =======

Noncurrent assets:
   Property, plant and equipment, net of
     accumulated depreciation                                   $   750         $ 2,254
   Goodwill                                                                       7,419
   Other assets                                                      10              38
   Deferred income taxes                                          2,093           2,093
   Provision for estimated loss on disposal of
     discontinued operations                                                     (7,419)
                                                                -------         -------
Net noncurrent assets of discontinued segment                   $ 2,853         $ 4,385
                                                                =======         =======
</TABLE>

The following summarizes revenues and operating results from discontinued
operations:

                                THREE MONTHS ENDED   NINE MONTHS ENDED
                                      March 31,        March 31,
                                        2000             2000
                                       -------         -------

Revenue from printer operations        $ 5,472         $20,361
Income (loss) from operations             (182)            569
Net income (loss)                         (141)            263

No interest expense has been allocated to discontinued operations. There are no
material contingent liabilities related to discontinued operations, such as
product or environmental liabilities or litigation, that remained with the
Company after the disposal of Datasouth's assets.


                                       8
<PAGE>   9

5.       SUPPLEMENTAL CASH FLOW DISCLOSURES

Supplemental cash flow information follows:

<TABLE>
<CAPTION>
                                                                      NINE MONTHS ENDED
                                                                          MARCH 31,
                                                                   -----------------------
                                                                     2001           2000
                                                                   -------        -------
<S>                                                                <C>            <C>

Interest paid                                                      $ 9,200        $ 4,462
Income taxes paid                                                      333            152

Noncash investing and financing activities:
  Common stock and stock options issued in connection
    with the Host-USA Acquisition                                                  52,258
  Subordinated notes issued in connection with acquisitions
    of businesses                                                    1,190         18,594
  Common stock issued in connection with debt issue costs            1,219          1,219
</TABLE>

6.        INVESTMENT IN AFFILIATED COMPANIES

The Company's investment in affiliated companies is comprised of the following:

                                             MARCH 31,      JUNE 30,
                                               2001           2000
                                             -------        -------

Gray Communications Systems, Inc.            $39,934        $46,057
Sarkes Tarzian, Inc.                          10,000         10,000
Rawlings Sporting Goods Company, Inc.          8,203          8,071
Total Sports, Inc.                                            7,151
iHigh.com, Inc.                                3,953          5,416
Other                                          1,429          1,240
                                             -------        -------
                                             $63,519        $77,935
                                             =======        =======


The Company accounts for its investments in Gray Communications Systems, Inc.
("Gray"), Rawlings Sporting Goods Company, Inc. ("Rawlings"), and prior to
December 17, 1999 (the date the Company consummated the Host-USA Acquisition),
Host and Capital, using the equity method. Beginning December 17, 1999, the
Company also accounts for its investment in iHigh.com (an investee of Host)
using the equity method. The amount that the Company's equity investments exceed
the Company's proportionate share of the investee's book value is being
amortized over 20 to 40 years similar to goodwill, with such amortization
(amounting to $414 and $696 for the nine months ended March 31, 2001 and 2000,
respectively) reported as an increase in the Company's equity in losses of
affiliated companies.

Prior to the Host-USA Acquisition on December 17, 1999, the Company accounted
for its investment in Host by the equity method on a six-month lag basis. The
Company accounts for its investment in Rawlings by the equity method on a one
month lag basis, in order to align Rawlings' fiscal quarters ending November 30,
February 28, May 31 and August 31 with the Company's fiscal quarters.

In November 2000, Total Sports, Inc. was sold to Quokka Sports Inc. ("Quokka").
In exchange for its investment in preferred and common stock of Total Sports,
the Company received Quokka common stock and warrants to purchase Quokka common
stock. On the effective date of the



                                       9
<PAGE>   10

exchange, the Company reduced the book value of its investment in Total Sports
to the current fair market value of the Quokka common stock received in the
exchange, recognizing a pretax loss of $6,180 as of the effective date of the
exchange, and began accounting for this investment as an "available-for-sale"
security. As such, unrealized gains and losses are recorded in "Other
comprehensive income," a separate component of stockholders' equity. On April
30, 2001, Quokka announced its intention to seek protection under the Federal
Bankruptcy Code. The Company therefore considered its investment in Quokka to be
permanently impaired, and recorded a loss of $1,837 during the three months
ended March 31, 2001, thereby reducing the book value of the Quokka investment
to zero.

In December 2000, Gray redeemed a portion of the Company's investment in Gray's
series A 8% preferred stock with an aggregate redemption value of $5,000,
resulting in proceeds to the Company of $5,000.

In January 1999, USA sold its investment in broadcast.com, inc., recognizing an
after-tax gain of approximately $40,000. As a result of Host's equity investment
in USA and the Company's equity investment in Host reported on a six-month lag
basis, the Company recognized approximately $1,900 in equity in earnings of
affiliates in the nine months ended March 31, 2000 pertaining to USA's gain on
the sale of its investment in broadcast.com, inc.

The aggregate operating results of affiliated companies reflecting, for the
three months and nine months ended March 31, 2001: (i) Gray, iHigh.com and
certain other equity investments for the three months and nine months ended
March 31, 2001; and (ii) Rawlings for the three months and nine months ended
February 28, 2001; and reflecting, for the three months and nine months ended
March 31, 2000: (i) Gray for the three months and nine months ended March 31,
2000; and (ii) Rawlings for the three months and nine months ended February 29,
2000, were as follows:

<TABLE>
<CAPTION>
                                   THREE MONTHS ENDED                  NINE MONTHS ENDED
                                       MARCH 31,                           MARCH 31,
                              ---------------------------         ---------------------------
                                 2001              2000              2001              2000
                              ---------         ---------         ---------         ---------
<S>                           <C>               <C>               <C>               <C>

Net revenue                   $ 103,765         $ 102,735         $ 258,944         $ 241,487
Income from operations           10,993            11,821            23,600            17,111
Net loss                           (420)           (1,256)           (6,571)          (12,018)
</TABLE>


7.       LONG-TERM DEBT

The Company is a party to a credit agreement with a group of banks providing for
(a) two term loans (the "Term Loans") for borrowings totaling $85,000 as of
March 31, 2001, bearing interest at either the banks' prime rate or the London
Interbank Offered Rate ("LIBOR") plus 2.5%, with all amounts outstanding under
the term loans due on December 17, 2001; and (b) a revolving loan commitment
(the "Revolver") for borrowings of up to a maximum amount ranging from $25,000
to $35,000 through December 17, 2001, bearing interest at either the banks'
prime rate or LIBOR plus 2.5%. Borrowings under the Revolver, including
outstanding letters of credit, are limited to an amount not to exceed a
percentage of eligible accounts receivable, determined monthly. As of March 31,
2001, borrowings of $23,675 and a letter of credit totaling $25 were outstanding
under the Revolver. As of March 31, 2001, borrowings totaling $102,900 under the
Term Loans and the Revolver were subject to a LIBOR-based rate of 7.56% and
borrowings of $5,775 were subject to the banks' prime rate of 8.0%. Interest on
prime rate advances is payable quarterly and at least quarterly on LIBOR-based
borrowings. The credit agreement contains certain financial covenants, the most
restrictive of which requires the maintenance of a debt service coverage ratio
determined quarterly. Long-term debt is collateralized by all of the Company's
assets, including all of its investments in affiliated companies.



                                       10
<PAGE>   11

As a result of issues pertaining to the restatement of financial statements
discussed in Note 2, among other reasons, the Company is not in compliance with
certain financial covenants and other provisions considered to be events of
default under the terms of the credit agreement as of March 31, 2001; however,
the Company is in the process of obtaining a waiver of these events of default
and any rights and remedies which may arise as a result of such non-compliance
until June 15, 2001. The Company is presently discussing with its lenders a
modification to the credit agreement, which would revise future financial
covenants and provide for an extension of the credit agreement beyond its
December 17, 2001 maturity date. Although the Company believes, based on its
current discussions with its lenders, that it will be able to execute an
acceptable amendment and extend the credit agreement prior to June 15, 2001, the
execution of such an amendment within that time period can not be assured. In
connection with the anticipated waiver, a director of the Company is expected to
increase his personal guarantee of the Company's debt under its bank credit
agreement to $100 million.

In connection with the Host-USA Acquisition, the Company issued subordinated
notes on December 17, 1999, bearing interest at 8%, having an aggregate face
value of $18,594. Interest is payable quarterly until maturity on January 17,
2003. Payment of interest and principal is subordinate to the bank credit
agreement.

The Company is a party to two interest rate swap agreements, which effectively
modify the interest characteristics of $45,000 of the Company's outstanding
long-term debt. The first agreement, effective January 1, 1999, involves the
exchange of amounts based currently on a fixed interest rate of 8.58% for
amounts currently based on a variable interest rate of LIBOR plus 2.5% through
December 31, 2002, without an exchange of the $20,000 notional amount upon which
the payments are based. The second agreement, effective January 5, 2000,
involves the exchange of amounts based currently on a fixed interest rate of
9.21% for amounts currently based on a variable interest rate of LIBOR plus 2.5%
through December 31, 2002 (or December 31, 2004, at the bank's option), without
an exchange of the $25,000 notional amount upon which the payments are based.
The differential paid or received as interest rates change is settled quarterly
and is accrued and recognized as an adjustment of interest expense related to
the debt. As a result of adopting a new accounting standard effective July 1,
2000 (see Note 12), the aggregate fair market value of the interest rate swaps
as of March 31, 2001 is combined with the fair market value of other derivatives
and included in the balance sheet as a component of "Other assets."

8.       INCOME TAXES

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


                                       11
<PAGE>   12

9.       COMPREHENSIVE NET INCOME (LOSS)

Comprehensive net income (loss) is as follows:

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                MARCH 31,                      MARCH 31,
                                                        -----------------------         ------------------------
                                                          2001            2000            2001            2000
                                                        -------         -------         -------         --------
<S>                                                     <C>             <C>             <C>             <C>

Net loss                                                $(6,261)        $(2,076)        $(9,464)        $(12,786)
Other comprehensive income:
   Recognize the cumulative change in the
     valuation of available-for-sale investments
     as a permanent decline, net of tax of $527             860
                                                        -------         -------         -------         --------
Comprehensive net loss                                  $(5,401)        $(2,076)        $(9,464)        $(12,786)
                                                        =======         =======         =======         ========
</TABLE>


10.      EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings
(loss) per share:

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                     MARCH 31,                            MARCH 31,
                                                          -----------------------------         -----------------------------
                                                             2001               2000               2001               2000
                                                          ----------         ----------         ----------         ----------
<S>                                                       <C>                <C>                <C>                <C>
Loss from continuing operations before cumulative
   effect adjustment                                      $   (6,261)        $   (1,935)        $  (12,624)        $  (13,049)
Cumulative effect of accounting change                                                               3,160
Income (loss) from discontinued operations                                         (141)                                  263
                                                          ----------         ----------         ----------         ----------
Net loss                                                  $   (6,261)        $   (2,076)        $   (9,464)        $  (12,786)
                                                          ==========         ==========         ==========         ==========

Weighted average number of common shares
   outstanding for basic earnings (loss) per share            35,213             34,699             35,128             27,082
Effect of dilutive employee stock options
                                                          ----------         ----------         ----------         ----------
Adjusted weighted average number of common
   shares and assumed conversions for diluted
   earnings (loss) per share                                  35,213             34,699             35,128             27,082
                                                          ==========         ==========         ==========         ==========

Basic earnings (loss) per share:
Loss from continuing operations before cumulative
   effect adjustment                                      $    (0.18)        $    (0.06)        $    (0.36)        $    (0.48)
Cumulative effect of accounting change                                                                0.09
Income from discontinued operations                                               (0.00)                                 0.01
                                                          ----------         ----------         ----------         ----------
Net loss                                                  $    (0.18)        $    (0.06)        $    (0.27)        $    (0.47)
                                                          ==========         ==========         ==========         ==========

Diluted earnings (loss) per share:
Loss from continuing operations before cumulative
   effect adjustment                                      $    (0.18)        $    (0.06)        $    (0.36)        $    (0.48)
Cumulative effect of accounting change                                                                0.09
Income from discontinued operations                                               (0.00)                                 0.01
                                                          ----------         ----------         ----------         ----------
Net loss                                                  $    (0.18)        $    (0.06)        $    (0.27)        $    (0.47)
                                                          ==========         ==========         ==========         ==========
</TABLE>



                                       12
<PAGE>   13

11. SEGMENT INFORMATION

Following the Host-USA Acquisition, the Company has four business segments
associated with its continuing operations that provide different products or
services: (a) marketing and production services, which primarily include
services rendered in connection with college athletics ("Collegiate Marketing
and Production Services"); (b) event management and marketing services
("Affinity Events"); (c) association management services ("Affinity Management
Services") and (d) consulting services ("Consulting"). Information for each of
the Company's segments is presented below. The Collegiate Marketing and
Production Services, Affinity Events and Affinity Management Services segments
were acquired on December 17, 1999; therefore, 1999 data only includes the
results of operations for the period beginning December 18, 1999 through
December 31, 1999.

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED                NINE MONTHS ENDED
                                                               MARCH 31,                        MARCH 31,
                                                      -------------------------         -------------------------
                                                        2001             2000             2001             2000
                                                      --------         --------         --------         --------
<S>                                                   <C>              <C>              <C>              <C>
                                                                      (RESTATED)                         (RESTATED)
Net revenues:
  Collegiate Marketing and Production Services        $ 30,115         $ 34,905         $ 72,716         $ 40,357
  Affinity Events                                        2,758            2,742           14,981            3,039
  Affinity Management Services                           2,764            1,774            7,817            2,117
  Consulting                                                 8                5               19            1,303
                                                      --------         --------         --------         --------
                                                      $ 35,645         $ 39,426         $ 95,533         $ 46,816
                                                      ========         ========         ========         ========
Operating income (loss):
  Collegiate Marketing and Production Services        $  1,667         $  5,044         $  5,003         $  4,775
  Affinity Events                                       (2,092)          (2,488)          (3,740)          (2,576)
  Affinity Management Services                             132               28              768               93
  Consulting                                                 8                5               19            1,303
  Amortization of acquisition intangibles               (1,127)          (1,113)          (3,284)          (1,300)
  Unallocated general and administrative costs            (616)            (388)          (1,669)          (1,150)
                                                      --------         --------         --------         --------
                                                      $ (2,028)        $  1,088         $ (2,903)        $  1,145
                                                      ========         ========         ========         ========
</TABLE>


12.      ACCOUNTING CHANGE

Effective July 1, 2000, the Company adopted Financial Accounting Standards
Board's Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("FAS 133"). FAS 133 requires the Company to recognize all
derivatives, consisting of warrants to purchase common stock of affiliated
companies and interest rate swap agreements, on the balance sheet at fair value.
As a result of adopting FAS 133, the Company recognized the cumulative effect of
the accounting change of $3,160, representing the value of the derivatives as of
July 1, 2000 of $5,097, less a deferred tax benefit of $1,937. Changes in the
value of these derivatives are recognized as earnings or losses. As a result of
adopting FAS 133, the aggregate fair market value of derivatives of $9,800 as of
March 31, 2001 is included in the balance sheet as a component of "Other
assets." The valuation of warrants is predominantly based on an independent
appraisal, and the values of interest rate swaps are based on estimated market
values.



                                       13
<PAGE>   14

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

OVERVIEW

Bull Run Corporation ("Bull Run" or the "Company"), based in Atlanta, Georgia,
is a sports, affinity marketing and management company through Host
Communications, Inc. ("Host"), its primary operating business acquired in
December 1999. Host's "Collegiate Marketing and Production Services" business
segment provides sports marketing and production services to a number of
collegiate conferences and universities, the National Collegiate Athletic
Association, and state high school associations. Host's "Affinity Events"
business segment produces and manages individual events, such as the "NFL
Quarterback Challenge," and several events series, including the "Hoop-It-Up(R)"
3-on-3 basketball tour and the "Toyota Golf Skills Challenge." In October 2000,
Host acquired Summit Sports & Events, Inc. ("Summit"), which adds Summit's
"Roundball Ruckus" 3-on-3 basketball tour and Summit's "3-v-3 Soccer Challenge"
tour to the Affinity Events segment. Host's "Affinity Management Services"
business segment provides associations such as the National Tour Association and
Quest (the J.D. Edwards users group association) with services ranging from
member communication, recruitment and retention, to conference planning,
marketing and administration.

Effective December 17, 1999, the Company acquired the stock of Host, Universal
Sports America, Inc. ("USA") and Capital Sports Properties, Inc. ("Capital") not
then owned, directly or indirectly, by the Company (the "Host-USA Acquisition").
Prior to the Host-USA Acquisition, the Company accounted for its investment in
Host and Capital under the equity method, and for its investment in USA under
the cost method. Beginning December 17, 1999, the financial results of Host, USA
and Capital have been consolidated with those of the Company. In January 2000,
Host's executive management team assumed executive management responsibilities
for USA, and many administrative and operating functions of the two companies
were combined. Effective July 1, 2000, USA was merged into Host. As used herein,
"Host-USA" refers to the combined businesses of Host and USA. Capital was solely
an investor in Host and has no operating business.

The Company also has significant investments in other sports and media
companies, including Gray Communications Systems, Inc. ("Gray"), the owner and
operator of 13 television stations, four newspapers and other media and
communications businesses; Sarkes Tarzian, Inc. ("Tarzian"), the owner and
operator of two television stations and four radio stations; Rawlings Sporting
Goods Company, Inc. ("Rawlings"), a supplier of team sports equipment; and
iHigh.com, Inc. ("iHigh"), a high school marketing network. From time to time,
the Company provides consulting services to Gray, in connection with Gray's
acquisitions and dispositions. The Company and Gray have entered into an
agreement whereby Gray has the option to acquire the shares of Tarzian owned by
the Company.

As of March 31, 2001, the Company owned approximately: 13.1% of the outstanding
common stock of Gray (representing 26.2% of the voting rights), in addition to
non-voting preferred stock and warrants to purchase additional Gray common
stock; 33.5% of the total outstanding common stock of Tarzian both in terms of
the number of shares of common stock outstanding and in terms of voting rights
(representing 73% of the equity of Tarzian for purposes of dividends, as well as
distributions in the event of any liquidation, dissolution or other termination
of Tarzian); 10.1% of the outstanding common stock of Rawlings, in addition to
warrants for the purchase of additional shares of Rawlings common stock; and
37.0% of the outstanding common stock of iHigh.

DISPOSAL OF COMPUTER PRINTER OPERATIONS

On July 26, 2000, the Company's Board of Directors authorized management to sell
the operating assets of Datasouth Computer Corporation ("Datasouth"), the
Company's wholly owned computer printer manufacturing business segment. The
Company's decision to discontinue its Datasouth segment was attributable to the
strategic decision to focus on the sports and affinity marketing



                                       14
<PAGE>   15

and management businesses following the Host-USA Acquisition. On September 29,
2000, the Company sold Datasouth's inventories, property and equipment and
intangible assets pertaining to the business. Accordingly, the operating results
and net assets associated with Datasouth's computer printer manufacturing
business as of March 31, 2001 and June 30, 2000, and for the nine months ended
March 31, 2001 and the three months and nine months ended March 31, 2000 have
been reflected as discontinued operations in the accompanying consolidated
financial statements. An estimate of Datasouth's operating loss subsequent to
the decision to discontinue the business, including the results for the three
months ended September 30, 2000, was accrued and reported as of June 30, 2000.

RESULTS OF OPERATIONS -
THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

Total revenues associated with continuing operations for the three months ended
March 31, 2001 were $35,645,000 compared to $39,426,000 for the same period in
2000. For the three months ended March 31, 2001, the Collegiate Marketing and
Production Services segment revenue was $30,115,000, Affinity Events segment
revenue was $2,758,000 and Affinity Management Services segment revenue was
$2,764,000, compared to $34,905,000, $2,742,000 and $1,774,000, respectively,
for the three months ended March 31, 2000. Collegiate Marketing and Production
Services segment revenue declined due to a decrease in corporate sponsorship
revenue in the current year period compared to the prior year, attributed to a
general reduction in advertising spending during a weaker economic environment,
and the transfer of certain of the Company's high school programs and
initiatives in the current year to its affiliate, iHigh. Affinity Management
Services segment revenue increased due to business growth over the past year in
terms of the number of associations serviced and growth in business with
existing associations. Consulting revenue from services provided to Gray was
$5,000 for each of the three months ended March 31, 2001 and 2000. The Company's
Collegiate Marketing and Production Services business is seasonal, in that the
majority of the revenue and operating profit is derived during the fiscal
quarters ending December 31 and March 31, since much of the revenue derived in
this segment is related to events and promotions held during the collegiate
football and basketball seasons. The Company's Affinity Events business is also
seasonal, in that the majority of the revenue and operating profit is derived
during the fiscal quarters ending June 30 and September 30, since much of the
revenue derived in this segment is currently generated during the Hoop-It-Up(R)
3-on-3 basketball tour, which begins in March and runs through October in each
year.

Operating costs and expenses of $37,673,000 for the three months ended March 31,
2001 included $35,930,000 associated with the operations of Host, plus
$1,127,000 of non-cash amortization expense associated with the amortization of
intangible assets derived primarily from the Host-USA Acquisition and the
acquisition of Summit. Operating costs and expenses of $38,338,000 for the three
months ended March 31, 2000 included $36,839,000 associated with the operations
of Host, plus $1,113,000 of non-cash amortization expense associated with the
amortization of intangible assets derived from the Host-USA Acquisition.

Equity in earnings (losses) of affiliated companies, totaling $(1,105,000) and
$(514,000) for the three months ended March 31, 2001 and 2000, respectively,
included the Company's proportionate share of the earnings or losses of (a)
Gray; (b) Rawlings; (c) iHigh and certain other equity investments; and (d)
solely in 2000, Host and Capital, net of goodwill amortization totaling $81,000
and $168,000 in 2001 and 2000, respectively.

In November 2000, Total Sports, Inc. was sold to Quokka Sports Inc. ("Quokka").
In exchange for its investment in preferred and common stock of Total Sports,
the Company received Quokka common stock and warrants to purchase Quokka common
stock. On April 30, 2001, Quokka announced its intention to seek protection
under the Federal Bankruptcy Code, and as a result, the Company determined that
its investment in Quokka was permanently impaired and recognized a $1,837,000
non-cash charge for the three months ended March 31, 2001 to reduce the book
value of the Quokka investment to zero.



                                       15
<PAGE>   16

The net change in the value of derivatives, consisting of warrants to purchase
common stock of affiliated companies and interest rate swap agreements, was
$(1,359,000) for the three months ended March 31, 2001, based primarily on a
reduction in the values of the Company's interest rate swap agreements.
Effective July 1, 2000, these derivatives are recorded on the balance sheet at
fair value in accordance with FAS 133 (refer to Note 12 to the Condensed
Consolidated Financial Statements and see "Accounting Change" below).

Interest and dividend income of $144,000 and $244,000 for the three months ended
March 31, 2001 and 2000, respectively, was primarily derived from dividends on
the Company's investment in Gray's series A and series B preferred stock.
Interest expense decreased to $2,715,000 for the three months ended March 31,
2001 from $2,817,000 for the same period in the prior year, primarily as a
result of a decrease in the amount of debt outstanding. In March 2001 and
February 2000, the Company issued approximately 697,000 and 305,000 shares of
its common stock, respectively, to a director of the Company who personally
guarantees up to $75 million of the Company's debt under its bank credit
agreement. The value of the shares issued, approximately $1,219,000 in both
years, is amortized over one year, and approximately $305,000 is included in
debt issue cost amortization for each of the three months ended March 31, 2001
and 2000.

Other income for the three months ended March 31, 2001 and 2000 consisted
primarily of income from an option agreement with Gray, whereby Gray has the
right to acquire the Company's investment in Tarzian for $10,000,000 plus
related costs. The Company recognized $174,000 as option income during the three
months ended March 31, 2001, as a result of amortizing a pro rata amount of an
option extension payment made by Gray in December 2000, which extended Gray's
option through December 31, 2001. In the three months ended March 31, 2000,
option income was also $174,000.

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

NINE MONTHS ENDED MARCH 31, 2001 COMPARED TO NINE MONTHS ENDED MARCH 31, 2000

Total revenues associated with continuing operations for the nine months ended
March 31, 2001 were $95,533,000 compared to $46,816,000 for the same period in
the prior year, reflecting the operations of Host-USA for the entire current
year period and only since the Host-USA Acquisition date (December 17, 1999) in
the prior year period. Collegiate Marketing and Production Services segment
revenue was $72,716,000, Affinity Events segment revenue was $14,981,000 and
Affinity Management Services segment revenue was $7,817,000 for the nine months
ended March 31, 2001, compared to $40,357,000, $3,039,000 and $2,117,000,
respectively, for the period December 17, 1999 (date of the Host-USA
Acquisition) to March 31, 2000. Consulting revenue from services provided to
Gray was $19,000 and $1,303,000 for the nine months ended March 31, 2001 and
2000, respectively.

Operating costs and expenses of $98,436,000 for the nine months ended March 31,
2001 included $93,482,000 associated with the operations of Host, plus
$3,285,000 of non-cash amortization expense associated with the amortization of
intangible assets derived primarily from the Host-USA Acquisition. Operating
costs and expenses of $45,671,000 for the nine months ended March 31, 2000
included $43,221,000 associated with the operations of Host, plus $1,300,000 of
non-cash amortization expense associated with the amortization of intangible
assets derived from the Host-USA Acquisition.

Equity in earnings (losses) of affiliated companies, totaling $(2,577,000) and
$(648,000) for the nine months ended March 31, 2001 and 2000, respectively,
included the Company's proportionate share of the earnings or losses of (a)
Gray; (b) Rawlings; (c) iHigh and certain other equity investments; and (d)
solely in the prior year, Host and Capital, net of goodwill amortization
totaling $414,000 and $616,000 in the nine months ended March 31, 2001 and 2000,


                                       16
<PAGE>   17

respectively. In January 1999, USA sold its investment in broadcast.com, inc.,
recognizing an after-tax gain of approximately $40,000,000. As a result of
Host's equity investment in USA and the Company's equity investment in Host
reported on a six-month lag basis, the Company recognized approximately
$1,900,000 in equity in earnings of affiliates in the nine months ended March
31, 2000 pertaining to USA's gain on the sale of its investment in
broadcast.com, inc.

In November 2000, Total Sports, Inc. was sold to Quokka Sports Inc. ("Quokka").
In exchange for its investment in preferred and common stock of Total Sports,
the Company received Quokka common stock and warrants to purchase Quokka common
stock. On the effective date of the exchange, the Company reduced the book value
of its investment in Total Sports to the current fair market value of the Quokka
common stock received in the exchange, recognizing a pretax loss of $6,180,000
as of the effective date of the exchange. As of March 31, 2001, the Company
further reduced the book value of its investment in Quokka to zero, recording an
additional non-cash charge of $1,837,000.

The net change in the value of derivatives, consisting of warrants to purchase
common stock of affiliated companies and interest rate swap agreements, was
$4,569,000 for the nine months ended March 31, 2001, based primarily on an
increase in the value of the Company's warrants to purchase Gray common stock,
net of reductions in the values of the Company's interest rate swap agreement.
(Refer to Note 12 to the Condensed Consolidated Financial Statements and see
"Accounting Change" below).

As a result of the accounting errors discovered by the Company in the financial
statements of USA, the Company incurred a charge of $11,330,000, reflecting the
extent to which USA's net tangible assets as of the date of the Host-USA
Acquisition were overstated.

Interest and dividend income of $646,000 and $699,000 for the nine months ended
March 31, 2001 and 2000, respectively, was primarily derived from dividends on
the Company's investment in Gray's series A and series B preferred stock.
Interest expense increased to $8,953,000 from $5,791,000 for the nine months
ended March 31, 2001 compared to the same period in the prior year, primarily as
a result of financing the Host-USA Acquisition in December 1999 and, to a lesser
extent, an increase in interest rates. Debt issue cost amortization of
$1,810,000 and $529,000 for the nine months ended March 31, 2001 and 2000,
respectively, includes $915,000 and $305,000, respectively, in connection with
amortization of the value of shares of the Company's common stock issued to a
director of the Company who personally guarantees up to $75 million of the
Company's debt under its bank credit agreement. In addition, the Company
recognized a $395,000 non-cash expense during the current fiscal year to reduce
previously unamortized debt issue costs as a result of amending certain terms of
its bank credit agreement, including a revision in the maturity date of the
credit facilities provided under the agreement.

Other income for the nine months ended March 31, 2001 and 2000 consisted
primarily of income on the option agreement with Gray, whereby Gray has the
right to acquire the Company's investment in Tarzian for $10,000,000 plus
related costs. During the nine months ended March 31, 2001, Gray paid the
Company $1,683,900 in connection with Gray's option to acquire the Company's
investment in Tarzian, extending the option through December 31, 2001, resulting
in income (net of amounts deferred for future recognition) of $1,113,000. Option
income was $531,000 for the nine months ended March 31, 2000.

The principal differences between the federal statutory tax rate of 34% and the
effective tax rates are nondeductible goodwill amortization and state income
taxes. As of March 31, 2001, the Company has a net deferred tax asset of
$4,632,000, primarily due to net operating loss carryforwards for federal tax
purposes that expire beginning in 2018. The Company believes it will generate
adequate taxable income from operations or the sale or other disposition of
appreciated nonoperating assets in an amount sufficient to realize the deferred
tax asset.


                                       17
<PAGE>   18

LIQUIDITY AND CAPITAL RESOURCES

Cash used in continuing operations for the nine months ended March 31, 2001 was
$699,000, compared to cash provided by continuing operations of $5,284,000 for
the same period in the prior year. In the nine months ended March 31, 2001,
receivables decreased $3,013,000 due to more aggressive collection efforts
employed by the Company during the current year, and to a 9.6% reduction in
revenue for the quarter ended March 31, 2001 compared to the prior year; prepaid
costs and expenses increased $3,917,000 due to the timing of guaranteed rights
fee payments; and accounts payable and accrued expenses increased $3,237,000 due
to the timing of payments. In the nine months ended March 31, 2000, accounts
receivable decreased $70,000, prepaid costs and expenses decreased $2,630,000
and accounts payable and accrued expenses increased $5,541,000 due to the
Host-USA Acquisition occurring on December 17, 1999. Therefore, the net changes
in working capital for the nine months ended March 31, 2000 primarily reflected
the net change in Host's and USA's working capital during the period December
18, 1999 to March 31, 2000. Cash provided by discontinued operations was
$1,972,000 for the nine months ended March 31, 2001, compared to $302,000 in the
same period of the prior year. The difference in cash provided by discontinued
operations was primarily a result of reductions in accounts receivable in the
current year, net of a decrease in accounts payable and accrued expenses.

Cash provided by continuing operation investing activities was $3,148,000 for
the nine months ended March 31, 2001. In December 2000, Gray redeemed for
$5,000,000 some of the Company's investment in Gray series A preferred stock.
Continuing operation investing activities for the nine months ended March 31,
2001 also included the cash acquisition cost of Summit and capital expenditures.
Cash used in continuing operation investing activities for the nine months ended
March 31, 2000 was $46,210,000, primarily as a result of the Host-USA
Acquisition. Net cash provided by discontinued operation investing activities
was $2,067,000 in the nine months ended March 31, 2001, primarily as a result of
cash proceeds on the sale of Datasouth assets received through that date. Net
cash used in discontinued operation investing activities was $605,000 in the
nine months ended March 31, 2000, consisting of capital expenditures and costs
incurred in connection with an acquisition of a computer printer business.

Cash used in financing activities was $6,117,000 for the nine months ended March
31, 2001, primarily as a result of $10,000,000 in repayments on the outstanding
principal of the Company's term note facilities, less the net borrowings of
$4,475,000 under the Company's revolving bank credit facility. Cash provided by
financing activities was $41,058,000 for the nine months ended March 31, 2000,
primarily as a result of financing the Host-USA Acquisition.

The Company is a party to two interest rate swap agreements described in Note 7
to the Condensed Consolidated Financial Statements. The estimated cost of
terminating the swap agreements, if the Company elected to do so, would have
been $1,975,000 as of March 31, 2001.

As a result of issues pertaining to the restatement of financial statements
discussed in Note 2 to the Condensed Consolidated Financial Statements, among
other reasons, the Company is not in compliance with certain financial covenants
and other provisions considered to be events of default under the terms of the
credit agreement as of March 31, 2001; however, the Company is in the process of
obtaining a waiver of these events of default and any rights and remedies which
may arise as a result of such non-compliance until June 15, 2001. The Company is
presently discussing with its lenders a modification to the credit agreement,
which would revise future financial covenants and provide for an extension of
the credit agreement beyond its December 17, 2001 maturity date. Although the
Company believes, based on its current discussions with its lenders, that it
will be able to execute an acceptable amendment and extend the credit agreement
prior to June 15, 2001, the execution of such an amendment within that time
period can not be assured. In connection with the anticipated waiver, a director
of the Company is expected to increase his personal guarantee of the Company's
debt under its bank credit agreement to $100 million.



                                       18
<PAGE>   19

All amounts outstanding under the Company's bank credit agreement currently
mature and are due and payable on December 17, 2001, although the Company is
currently discussing an extension of the maturity date with its banks to at
least June 30, 2002. The Company believes that its relationship with its bank
group is good, and anticipates entering into a new credit agreement prior to the
December 17, 2001 maturity date or the extended maturity date of June 30, 2002,
under terms substantially similar to those of its current credit agreement.
There can be no assurance that the Company will be able to enter into a new
credit agreement or the terms thereof prior to the maturity date. The Company
anticipates that its current working capital, funds available under its current
credit facilities, quarterly cash dividends on the Gray preferred stock and Gray
common stock owned by the Company, and cash flow from operations will be
sufficient to fund its working capital requirements, capital spending
requirements and debt service requirements, for at least the next 12 months,
assuming the Company and the banks reach acceptable terms of certain
modifications to the Company's credit agreement and the successful and timely
refinancing of the Company's bank credit facility prior to the maturity date.

INTEREST RATE AND MARKET RISK

The Company is exposed to changes in interest rates due to the Company's
financing of its acquisitions, investments and operations. Interest rate risk is
present with both fixed and floating rate debt. The Company uses interest rate
swap agreements (as described in Note 7 to the Condensed Consolidated Financial
Statements) to manage its debt profile.

Interest rate swap agreements generally involve exchanges of underlying face
(notional) amounts of designated hedges. The Company continually evaluates the
credit quality of counterparties to interest rate swap agreements and does not
believe there is a significant risk of nonperformance by any of the
counterparties to the agreements.

Based on the Company's debt profile at March 31, 2001 and 2000, a 1% increase in
market interest rates would increase interest expense and decrease income before
income taxes (or alternatively, increase interest expense and increase the loss
before income taxes) by $157,000 and $509,000 for the three months and nine
months ended March 31, 2001, respectively, and $159,000 and $374,000 for the
three months and nine months ended March 31, 2000, respectively. These amounts
were determined by calculating the effect of the hypothetical interest rate on
the Company's floating rate debt, after giving effect to the Company's interest
rate swap agreements. These amounts do not include the effects of certain
potential results of increased interest rates, such as a reduced level of
overall economic activity or other actions management may take to mitigate the
risk. Furthermore, this sensitivity analysis does not assume changes in the
Company's financial structure that could occur if interest rates were higher.

The Company holds investments in certain common stocks, preferred stocks and
warrants to purchase common stock. The Company is exposed to changes in market
values of these investments, some of which are publicly traded common stocks. In
each case where there exists a quoted market price for a publicly-traded
security in which the Company holds investments, the investment is accounted for
under the equity method, whereby changes in the quoted market price of the
security do not impact the carrying value of the investment. However,
fluctuations in market prices of investments could ultimately affect the amounts
the Company might realize upon a disposal of some or all of its investments.
Based on management's estimates of the aggregate fair value of the Company's
investments in affiliated companies, a 10% change in the aggregate market value
of such investments would increase or decrease the aggregate market value by
approximately $7.5 million as of March 31, 2001 and $6.3 million as of June 30,
2000.

ACCOUNTING CHANGE

Effective July 1, 2000, the Company adopted Financial Accounting Standards
Board's Statement No. 133, "Accounting for Derivative Investments and Hedging
Activities" ("FAS 133"). FAS 133 requires the Company to recognize all
derivatives, consisting of warrants to purchase common



                                       19
<PAGE>   20

stock of affiliated companies and interest rate swap agreements, on the balance
sheet at fair value. As a result of adopting FAS 133, the Company recognized the
cumulative effect of the accounting change of $3,160,000, representing the value
of the derivatives as of July 1, 2000 of $5,097,000, less a deferred tax benefit
of $1,937,000. Changes in the value of these derivatives are recognized as
earnings or losses.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. When used
in this report, the words "believes," "expects," "anticipates," "estimates" and
similar words and expressions are generally intended to identify forward-looking
statements. Statements that describe the Company's future strategic plans, goals
or objectives are also forward-looking statements. Readers of this Report are
cautioned that any forward-looking statements, including those regarding the
intent, belief or current expectations of the Company or management, are not
guarantees of future performance, results or events, and involve risks and
uncertainties. The Company undertakes no obligation to update such
forward-looking statements to reflect subsequent events or circumstances. Actual
results and events may differ materially from those in the forward-looking
statements as a result of various factors including, but not limited to the
following: (i) the Company's bank credit agreement matures on December 17, 2001
and there can be no assurance that the Company will be able to enter into a new
credit agreement on terms favorable to the Company or at all; (ii) the
Company's, Gray's and Rawlings' leverage may adversely affect their ability to
obtain financing, thereby impairing their ability to withstand economic
downturns or competitive pressures; (iii) Gray's business depends on its
relationships with, and success of, its national network affiliates; (iv) the
Company's and Rawlings' businesses are seasonal; (v) adverse events affecting
baseball, such as negative publicity or strikes, may adversely affect Rawlings'
business; (vi) the Company's and Rawlings' businesses depend on short term
contracts and the inability to renew or extend these contracts could adversely
affect their businesses; and (vii) the Company may lose money on some of its
contracts, because it is obligated for certain contractual guaranteed rights fee
payments thereunder.

                           PART II. OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
                  None

(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:  May 21, 2001                      By: /s/ FREDERICK J. ERICKSON
                                             ----------------------------------
                                         Frederick J. Erickson
                                         Vice President-Finance, Treasurer
                                         and Assistant Secretary



                                       20