Report of Independent Auditors
Board of Directors and Stockholders of Bull Run Corporation:
We have audited the accompanying consolidated balance sheets of Bull Run Corporation as of December 31, 1997 and 1996, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of Host Communications, Inc. ("HCI") and Capital Sports Properties, Inc. ("CSP") as of and for the year ended June 30, 1996 and 1995 and as of and for the six months ended June 30, 1996 and the year ended December 31, 1995, respectively, have been audited by other auditors whose reports have been furnished to us; the report as to HCI included an explanatory paragraph relating to an accounting change in 1996 in the method of recognizing certain revenue and related expenses. Our opinion, insofar as it relates to data included for HCI and CSP for their respective periods in 1996 and 1995, is based solely on the reports of the other auditors. In the consolidated financial statements, the Company's investment in HCI and CSP is stated at $11,854,000 at December 31, 1996; the Company's equity in the net income of HCI and CSP is stated at $762,000 and $245,000 for the years ended December 31, 1996 and 1995, respectively; and the Company's cumulative effect of accounting change recognized by affiliate is stated at $(274,000) for the year ended December 31, 1996.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and, for 1996 and 1995, the reports of other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bull Run Corporation at December 31, 1997 and 1996, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles.
As discussed in Note 2 to the Consolidated Financial Statements, during 1996 HCI changed its method of recognizing certain revenue and related expenses.
Atlanta, Georgia February 10, 1998, except as to Note 5, for which the date is March 20, 1998.