Privately-held Host Communications, Inc. ("HCI"), based in Lexington, Kentucky, provides multimedia, promotional marketing and event management services to universities, athletic conferences and associations, the most prominent of which is the National Collegiate Athletic Association ("NCAAš"). In 1997, Bull Run increased its effective ownership in HCI's common stock to 30.2%, plus 51.5% of HCI's outstanding preferred stock. Most of Bull Run's investment in HCI is held through its 51.5%-owned affiliate, Capital Sports Properties, Inc., whose assets consist solely of HCI common stock and HCI preferred stock. HCI's operations include:
Sports Marketing - HCI manages the production, sales and syndication of basketball and football radio and television broadcasts, as well as the publishing and printing of award-winning sports magazines for an impressive list of client universities and conferences. HCI's new five-year agreement with the NCAA, an HCI client since 1975, took effect in 1997, providing HCI the exclusive rights to NCAA corporate partners' promotional licensing marks, championship radio broadcasts, publication and distribution of championship event programs and associated materials, as well as exclusive marketing rights to market NCAA fan festivals in conjunction with championship events.
Audio / Video Services - HCI's MainStreet Productions operates recording studios equipped to handle live broadcast productions and soundtracks for radio, video and multi-range presentations such as the "NCAA Today" broadcasts on ESPN, producing video presentations from concept to completion.
Publishing and Printing - Among the 400-plus annual publications produced by HCI are NCAA basketball championship programs, including the high-profile NCAA Men's and Women's Final Fourš programs. HCI provides services to over 600 clients annually, ranging from graphic design, typesetting and image assembly, to printing and binding. Such services were provided to Bull Run in connection with the printing of this 1997 Annual Report.
Management Services - HCI manages the affairs of the National Tour Association, Quest Association (i.e., the national J. D. Edwards users group), International Spa and Fitness Association, National Limousine Association and United Motor Coach Association, by providing services in the areas of marketing, publishing, government affairs, business, education and membership growth.
HCI's 33.8%-owned affiliate, Universal Sports America, Inc. ("USA"), provides sponsorship and promotional opportunities involving college athletics and participatory sporting events to corporate sponsors and advertisers. Bull Run also directly owns USA preferred stock, which is convertible to approximately 3% of USA's fully-diluted common stock. USA's operations include:
Collegiate Sports - USA provides management and marketing services to athletic departments and conferences, including the development and marketing of corporate sponsor programs, providing print, publication, and video production services (generally outsourced to HCI).
Events - USA manages and/or operates participatory sporting events, on the local, collegiate, national and international levels, such as the Hoop-It-UpTM three-on-three basketball tournaments.
Properties - USA develops and markets trademarks that currently include the Historically Black Collegiate Coalition (HBCCTM), Pepito BallTM and Tradition Bowl games, such as the Dr Pepper Red River Shoot-outTM, the annual football contest between the University of Texas and the University of Oklahoma.