

     ALLIANCE  ENTERTAINMENT CORP. REPORTS OPERATING RESULTS FOR APRIL; 
       COURT SETS ADEQUACY HEARING DATE FOR PLAN OF REORGANIZATION  

     NEW YORK -- May 29, 1998 -- Alliance Entertainment Corp. (OTC: AETTQ) filed
its monthly  operating report and announced that following an expected  positive
outcome  of the  June  23,  1998,  hearing  on the  adequacy  of its  Disclosure
Statement,  it will commence with the  solicitation  process for approval of its
Plan of Reorganization. In the report filed with the Office of the United States
Trustee,  the Company  reported a  consolidated  net loss of $4.5 million on net
sales  of  $23.4  million.  The loss  includes  $2.3  million  in  interest  and
reorganization  expenses. The April results compare with a consolidated net loss
of $3.2 million on net sales of $25.8 million,  and $2.5 million in interest and
reorganization expenses for March reporting period.

     "The April results are  consistent  with our 1998 business  plan. I am very
pleased that we have filed our Disclosure  Statement and Plan of  Reorganization
and  continue to move  forward  with the  confirmation  process with a projected
emergence  from  Chapter  11 in late  summer,"  said  Eric  Weisman,  Alliance's
president and chief executive officer.

     "The  proposed  Plan of  Reorganization  will  result in a  privately  held
company focused on the music distribution  business and opportunities for growth
using new channels of distribution,  including the Internet. We have worked hard
over the last 10 months and made difficult  decisions in order to bring Alliance
out  of  Chapter  11  as  a  profitable  company.  We  have  closed  facilities,
consolidated  procedures  and  decreased  our  workforce  in order to secure the
future of the Company," Mr. Weisman continued.

     The  Company's  Plan  calls  for the  majority  of the  equity in the newly
reorganized  Alliance to be  distributed  to the secured bank claim holders with
The Chase  Manhattan  Bank acting as agent for the syndicate of banks  included.
The Plan also calls for the  cancellation  of the current  common  stock with no
distribution to the  shareholders.  The  cancellation  will occur in conjunction
with the confirmation of the Plan.

     Alliance Entertainment Corp. is the largest wholesaler of prerecorded music
and  related  products.  In  addition,  Alliance  through its Concord and Castle
subsidiaries,  is a developer and marketer of catalog content in several genres.
     The  Company  currently  employees  approximately  800 people in the United
States,
Canada and the United Kingdom and maintains  headquarters in Coral Springs, Fla.
Alliance Entertainment Corp. and certain of its subsidiaries filed to reorganize
under Chapter 11 on July 14, 1997.

     Forward-looking  statements  herein are made  pursuant  to the safe  harbor
provisions  of the  Private  Securities  Litigation  Reform  Act of 1995.  These
forward-looking  statements  can  generally  be  identified  as such because the
context of the  statement  will  include  words such as the Company  "believes,"
"expects," "anticipates," or words of similar import. Similarly, statements that
describe  the  Company's  future  plans,  objectives,  estimates  or  goals  are
forward-looking statements. There are certain important factors that could cause
results  to  differ  materially  from  those   anticipated  by   forward-looking
statements  made  herein.  Investors  are  cautioned  that  all  forward-looking
statements involve risks and uncertainty.


