Crown Media Holdings Announces 43% Increase in Total Gross Revenues and 48% Increase in Subscribers for Third Quarter 2001.

Business Editors

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Nov. 6, 2001

Crown Media Holdings, Inc. (Nasdaq: CRWN) ("Crown Media" or the "Company") today reported pro forma gross revenues of $27.4 million for the third quarter of 2001, a 43% increase from $19.2 million for the third quarter of 2000.

Operating Highlights for the Quarter

-- Crown Media subscribers increased 48% to 83 million worldwide as of
September 30, 2001, from 56 million subscribers as of September 30, 2000. The
Hallmark Channel ended the quarter with 40 million subscribers in the United
States and 43 million international subscribers across over 100 countries.
Subscribers of our international channel increased 43% over third quarter 2000
and 3% over second quarter 2001. Subscribers of our domestic channel increased
53% over third quarter 2000 and 27% over second quarter 2001.

-- During the third quarter, Crown Media completed its global re-branding
initiative, re-branding all of its outlets throughout the world as the Hallmark
Channel, and firmly positioning itself as a true global network. The
re-branding has allowed Crown Media to capitalize on the global recognition of
the Hallmark brand, which represents quality, caring, and integrity. The use of
the Hallmark name has significantly increased brand awareness with viewers and
advertisers.

-- In August 2001, Crown Media entered into a strategic relationship with
DIRECTV, under which the Hallmark Channel US is more widely distributed on
DIRECTV's digital satellite television service. In addition, the two companies
are exploring the distribution of additional programming services, new
interactive broadband applications and pay-per-view distribution of programs
from Crown Media's film library. As part of this relationship, DIRECTV received
approximately 5.4 million shares of Crown Media Class A Common Stock.

-- During the quarter, Crown Media signed a new long-term distribution
agreement with CSC Holdings, Inc., securing the continued and expanded carriage
of the Hallmark Channel in the U.S. by Cablevision. Crown Media remains in
active negotiations with Cox and Comcast. Crown Media has previously negotiated
long-term distribution agreements with TimeWarner, DIRECTV, AT&T, Charter,
EchoStar, and Adelphia.

-- At the end of the quarter, Crown Media completed its purchase of
approximately 700 film titles, representing over 3,000 hours of programming,
from Hallmark Entertainment Distribution, LLC. In conjunction with the
acquisition, Crown Media entered into a credit agreement with a group of banks,
which have extended to Crown Media a five-year, $285.0 million secured credit
facility, in addition to Crown Media's $150.0 million line of credit from HC
Crown Corporation.

-- On November 1, 2001, Crown Media signed a distribution agreement with ntl
Group Limited, the United Kingdom's leading broadband cable television company.
The Hallmark Channel was launched on ntl's platform on November 1, as part of
ntl's transition from analogue to digital cable transmission, providing the
Hallmark Channel with approximately 500,000 new subscribers in the United
Kingdom, increasing total distribution in the UK to approximately 6 million.

-- More recently, Crown Media consolidated its worldwide organization in order
to capitalize on opportunities for operating efficiencies within its worldwide
divisions and to strengthen the global Hallmark Channel brand.

"We continue to make significant progress on our strategy to build a global brand, offer high quality family friendly content, and increase our worldwide distribution. Our success in each of these areas is evident in our strong financial performance, particularly the growth of our subscriber fees," stated David Evans, President and CEO of Crown Media Holdings.

"Our new agreements with ntl and DIRECTV, together with the continuing roll-out of the Hallmark Channel by a number of our other significant MSO's, have substantially increased our distribution. The development of our global network, which now reaches over 83 million subscribers, in conjunction with the completion of the re-branding of our channels under the Hallmark name, position the Hallmark Channel as a premier family-friendly cable network," Mr. Evans continued.

"In addition, with the acquisition of the film assets, we now can improve our programming schedules, realize significant content cost savings, and create new revenue streams. Each of these steps in the evolution of the business will drive our growth in the fourth quarter and into next year." Mr. Evans concluded.

Financial Results

On May 9, 2000, Crown Media Holdings completed its initial public offering. At the same time, Crown Media Holdings acquired 100% of Crown Media International, Inc., acquired as a result 22.5% of the common interests in Crown Media United States, LLC (formerly known as Odyssey Holdings, LLC) and 50% of H&H Programming -Asia, LLC then owned by Crown Media International, and acquired an additional 55% of the common interests in Crown Media United States. Prior to that date, Crown Media Holdings did not have any significant operations. On March 15, 2001, Crown Media Holdings acquired the remaining 22.5% of common interests in Crown Media United States and the remaining 50% interest in H&H Programming-Asia, which operated The Kermit Channel. The consolidated financial statements of Crown Media Holdings include the results of operation for Crown Media International as a predecessor corporation for all periods presented, include 22.5% of the common interests in Crown Media United States for the entire year ended December 31, 2000 and include each of the other interests described above from the date of acquisition. The following unaudited pro forma information combines the results of operations of Crown Media Holdings, Crown Media International, Crown Media United States and H&H Programming - Asia as if the reorganization and the acquisitions described above involving these entities had occurred on January 1st of the periods presented, along with certain pro forma adjustments to give effect to amortization of goodwill and other intangibles and excludes contract terminations and other adjustments. The contract terminations and other adjustments consisted primarily of exit charges and write-offs of approximately $28.2 million. These relate to programming agreements with The Jim Henson Company and EM.TV, and are included as programming costs in Crown Media's consolidated financial statements.

Crown Media reported pro forma gross revenue of $27.4 million for the third quarter of 2001, a 43% increase from $19.2 million for the third quarter of 2000. Gross subscriber fees revenue in the third quarter increased 27% to $18.2 million, from $14.3 million in the prior year's quarter, reflecting expansion in existing markets. Advertising and other revenue increased 87% to $9.2 million during the quarter, from $4.9 million in the third quarter of 2000, as the Company's growing subscriber base and channel programming became more attractive to advertisers.

For the nine months ended September 30, 2001, Crown Media reported pro forma gross revenue of $80.6 million, a 67% increase from $48.4 million for the same period last year. Gross subscriber revenue for the first nine months of 2001 increased 48% to $54.4 million, from $36.8 million in the prior year's period, while advertising and other revenue increased 125% to $26.1 million for the nine months ended September 30, 2001, from $11.6 million in the year earlier period.

For the third quarter of 2001, total pro forma cost of services increased to $41.7 million from $31.1 million during the same quarter of 2000. Within cost of services, programming expenses rose 43% quarter over quarter to $23.7 million as the Company continues to refine and enhance the breadth of the programming aired on its channels. Operating costs, which consist of playback, dubbing and subtitling, transponder and interstitial expenses, increased 24% to $18.1 million for the third quarter of 2001. The increase in operating costs was primarily due to the purchase of programming from third party suppliers to meet customer demands and the delay in the close of the film assets transaction to September 28, 2001. Pro forma selling, general and administrative expenses increased to $19.1 million for the three months ended September 30, 2001, from $14.1 million in the year earlier period. Pro forma marketing expenses increased to $10.8 million for the three months ended September 30, 2001, from $4.6 million in the year earlier period primarily due to the re-branding of our domestic channel on August 5, 2001, as the Hallmark Channel, aggressive marketing campaigns completed on August 5, 2001, to drive consumer awareness of the channel, and the introduction of our new brand package.

Total pro forma cost of services for the nine months ended September 30, 2001 increased to $112.0 million from $79.5 million during the same period in 2000. Within cost of services, programming expense increased to $65.8 million, from $41.5 million in the first nine months of 2000. Operating costs for the first nine months of 2001 increased 21% to $46.2 million, compared to $38.1 million in the first nine months 2001. Pro forma selling, general and administrative expenses increased to $59.7 million for the nine months ended September 30, 2001, from $48.1 million in the prior year period. Pro forma marketing expenses increased to $27.6 million for the nine months ended September 30, 2001, from $13.2 million in the prior year period primarily due to the re-branding of our domestic channel on August 5, 2001, as the Hallmark Channel, aggressive marketing campaigns completed on August 5, 2001, to drive consumer awareness of the channel, and the introduction of our new brand package.

The pro forma loss before interest, taxes, depreciation and amortization (EBITDA) totaled $(38.4) million for the third quarter of 2001, compared to a pro forma EBITDA loss of $(28.1) million for the same period last year. The pro forma net loss for the three month period ended September 30, 2001 totaled $(53.5) million, or $(0.51) per share, compared to $(36.4) million, or $(0.56) per share, in the third quarter of 2000.

The pro forma EBITDA loss for the nine months ended September 30, 2001 totaled $(105.6) million, compared to a pro forma EBITDA loss of $(84.9) million for the same period last year. The pro forma net loss totaled $(145.9) million, or $(1.40) per share, for the first nine months of 2001, compared to $(109.9) million, or $(1.68) per share, for the first nine months of 2000.

At September 30, 2001 Crown Media had cash and cash equivalents totaling $10.5 million and a $285.0 million credit agreement with a group of banks, of which $65.4 million is currently available, and a $150.0 million line of credit with HC Crown Corporation. For the three months ended September 30, 2001, capital expenditures totaled $2.6 million while the cost of programming acquired totaled $26.4 million. Capital expenditures for the nine months ended September 30, 2001, totaled $11.1 million, while the cost of programming acquired totaled $66.5 million.

Conference Call and Webcast to be Held November 6 at 11:00 a.m. ET

Crown Media Holdings' management will conduct a conference call this morning at 11:00 a.m. Eastern Time to discuss the third quarter 2001 results. Investors and interested parties may listen to the call via a live webcast accessible through the investor relations section of the Company's web site at www.crownmedia.net. To listen, please register and download audio software at the site at least 15 minutes prior to the start time. The webcast will be available on the site for approximately three months, while a telephone replay of the call is available for 7 days beginning at 1:00 p.m. Eastern Time, November 6, at 800-633-8284 or 858-812-6440 (international callers), reservation # 19817658.

About Crown Media Holdings, Inc.

Crown Media Holdings, Inc. owns and operates pay television channels dedicated to high quality, broad appeal, entertainment programming. The company currently operates and distributes the Hallmark Channel in the U.S. and more than 100 international countries. The combined channels have over 83 million subscribers worldwide. Significant investors in Crown Media Holdings include Hallmark Entertainment, Inc., a subsidiary of Hallmark Cards, Inc., Liberty Media Corp., DIRECTV, Inc., VISN Management Corp., a for-profit subsidiary of the National Interfaith Cable Coalition, and J. P. Morgan Partners (BHCA), L. P.

Forward-looking Statements

Statements contained in this press release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. Words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Such risks and uncertainties include: competition for distribution of channels, viewers, advertisers, and the acquisition of programming; fluctuations in the availability of programming; fluctuations in demand for the programming Crown Media airs on its channels; and other risks detailed in the Company's filings with the Securities and Exchange Commission, including the Risk Factors stated in the Company's 10-K Report for the year ended December 31, 2000 and 10-Q Report for the quarter ended June 30, 2001. Crown Media Holdings is not undertaking any obligation to release publicly any updates to any forward looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

                      Crown Media Holdings, Inc.
              Selected Pro Forma Financial Information(a)
           ($ in thousands, except share and per share data)

                         Three Months Ended         Nine Months Ended
                            September 30,             September 30,
                         2001         2000         2001         2000

Gross revenues:
 Subscriber Fees       $18,211      $14,289       $54,432     $36,757
 Advertising             8,954        4,259        25,388      10,451
 Other                     242          666           739       1,153

Total gross revenues    27,407       19,214        80,559      48,361
 Amort. of subscriber
  acquisition fees      (1,072)        (387)       (4,619)       (437)

Net revenues            26,335       18,827        75,940      47,924
Cost of Services:
 Programming Costs      23,671       16,504        65,785      41,465
 Operating Costs        18,052       14,573        46,165      38,082

Total Cost of Services  41,723       31,077       111,950      79,547
Selling, Gen. & Admin.
 Expenses               19,107       14,050        59,654      48,132
Marketing Expenses      10,773        4,629        27,601      13,164
Amort. of Goodwill
 & Other Intangibles     5,524        5,524        16,462      16,462

Loss from Operations  $(50,792)    $(36,453)    $(139,727)  $(109,381)

Net Loss              $(53,511)    $(36,402)    $(145,919)  $(109,924)

Net Loss per Share    $  (0.51)    $  (0.56)    $   (1.40)  $   (1.68)

Weighted Avg. Shares
 Out.                  104,149       65,377       104,122      65,377

(a) On May 9, 2000, Crown Media Holdings completed its initial public offering. At the same time, Crown Media Holdings acquired 100% of Crown Media International, Inc., acquired as a result 22.5% of the common interests in Crown Media United States, LLC (formerly known as Odyssey Holdings, LLC) and 50% of H&H Programming -Asia, LLC then owned by Crown Media International, and acquired an additional 55% of the common interests in Crown Media United States. Prior to that date, Crown Media Holdings did not have any significant operations. On March 15, 2001, Crown Media Holdings acquired the remaining 22.5% of common interests in Crown Media United States and the remaining 50% interest in H&H Programming-Asia, which operated The Kermit Channel. The consolidated financial statements of Crown Media Holdings include the results of operation for Crown Media International as a predecessor corporation for all periods presented, include 22.5% of the common interests in Crown Media United States for the entire year ended December 31, 2000 and include each of the other interests described above from the date of acquisition. The above-stated unaudited pro forma information combines the results of operations of Crown Media Holdings, Crown Media International, Crown Media United States and H&H Programming - Asia as if the reorganization and the acquisitions described above involving these entities had occurred on January 1st of the periods presented, along with certain pro forma adjustments to give effect to amortization of goodwill and other intangibles and excludes contract terminations and other adjustments. The pro forma financial data is not necessarily indicative of results of operations that would have occurred had the initial public offering, reorganization and the acquisitions described above been completed as of, or at the beginning, the periods presented or that it might be obtained in the future. Certain reclassifications have been made to conform prior periods' data to the current presentation. These reclassifications have no effect on the reported pro forma net loss. Additionally, during the year, adjustments were made to goodwill and other intangibles as deemed necessary and reflected in the above financial statements.