Yucaipa Commits $25 Million to Fund Alliance's Digital Media Businesses; Credit Suisse First Boston Retained to Advise Company.

Business Editors/High-Tech & Entertainment Writers

CORAL SPRINGS, Fla.--(BUSINESS WIRE)--Nov. 20, 2000

Alliance Entertainment ("Alliance" or the "Company"), a leading provider of commerce solutions for the home entertainment product marketplace, announced today that The Yucaipa Companies ("Yucaipa") has committed to invest $25 million to fund the growth of Alliance's digital media businesses, including All Media Guide ("AMG") and RedDotNet ("RDN," formerly known as Digital On-Demand). In addition, the Company announced the retention of Credit Suisse First Boston ("CSFB") as its advisor on future strategic consolidation opportunities for both its digital media and distribution and fulfillment businesses.

Ron Burkle, Chairman of the Company and Managing General Partner of Yucaipa, stated: "We are pleased to commit additional equity capital to fund Alliance's exciting growth businesses. In addition, we believe there are some significant value creation opportunities in the home entertainment industry which can be achieved through consolidation and Alliance intends to aggressively pursue such strategic relationships."

The Company also announced today its plans to enhance the capabilities of its RDN system (which features on-demand manufacturing) through the launch of its "Mercury Dot" technology during the month of December. The Mercury Dot technology delivers advanced preview, multimedia and search capabilities in an integrated system which includes multiple screens located throughout the store. The Mercury Dot technology will be driven by the All Music Guide's meta-data and a songs clips database recently created by AMG. Specifically, the Mercury Dot technology will allow consumers to access album artwork and information, reviews, biographies, 30 second song clips, and complete artists and similar artist discographies. The purpose of the Mercury Dot technology is to aid retailers in their in-store merchandising efforts by promoting the sale of on-demand manufactured product, digital downloads to portable devices, special orders of out of stock items through Alliance's consumer direct fulfillment services, and currently stocked music in the store.

The Company's decision to deploy the Mercury Dot technology is a result of (i) the ability to create new revenue streams by increasing transaction and fee based opportunities beyond on-demand manufacturing, and (ii) delays in the release and approval of quality content being made available for burning on the RDN Network. In connection with this repositioning and the overall assessment of the current level of on-demand burning transactions, RDN has reduced its workforce to a level appropriate to support the implementation of its refocused business model.

Eric Weisman, President and CEO of the Company, commented: "Alliance's strategy has consistently been to pursue economically viable business models for both traditional and new economy products and services in a capital-efficient manner. With the repositioning of RDN to focus on the deployment of the Mercury Dot technology, all of our existing businesses are now moving forward on a solid path of profitable growth."

Larry Kalantari, Alliance's Executive Vice President of Corporate Development, will direct the Company's efforts in pursuing consolidation opportunities for both the digital media and distribution and fulfillment businesses. He will work closely with CSFB to determine the appropriate strategic relationships for the Company. "The potential for consolidation within the home entertainment product industry creates an enormous opportunity today," Kalantari stated. "We are pursuing transactions which will increase the profitability and market presence of our products and services as well as create additional value for our shareholders."

About The Yucaipa Companies

Based in Los Angeles, California, The Yucaipa Companies is a private investment firm specializing in acquiring and operating companies in the retail, distribution, logistics and technology areas. Since 1986, Yucaipa has organized and completed over twenty transactions with an aggregate value in excess of $30 billion.

About Alliance Entertainment Corp.

Alliance Entertainment Corp. (www.aent.com) is a leading provider of business-to-business commerce solutions which are essential to transact commerce in the home entertainment product marketplace. Through its Distribution and Fulfillment Services Group, Alliance offers an extensive product inventory (including CDs, cassettes, DVDs, videos, video games and related merchandise), e-commerce fulfillment capabilities and innovative technology and support services for today's marketplace. Through its Network and Information Services Group, Alliance is a leading distributor of information and digital entertainment content through RedDotNet's proprietary broadband network (www.reddotnet.com). In addition, Alliance is a leading provider of information services through the All Media Guide (AMG) databases. AMG's customers license its e-commerce enabling entertainment databases to support their Internet retailing businesses. AMG is also a developer of proprietary Web Sites for music (www.allmusic.com), movies (www.allmovie.com), and games (www.allgame.com).