
News Release
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Sitrick and Company Inc.
Los Angeles/New York

                                              Contact: Sandra Sternberg
                                                       Brenda Adrian
                                                       Sitrick and Company
                                                       310-788-2850

FOR IMMEDIATE RELEASE
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     ALLIANCE  ENTERTAINMENT CORP. REORGANIZATION MOVES FORWARD; 
                      SOLICITATION PROCESS BEGINS  

     NEW YORK -- July 6, 1998 -- Alliance Entertainment Corp. (OTC: AETTQ) filed
its monthly  operating report with the Office of the United States Trustee.  The
Company  reported a consolidated  net loss of $7.2 million on net sales of $22.9
million.  The loss includes $2 million in interest and reorganization  expenses,
$3.9  million in losses from its  unconsolidated  operations,  including  Castle
Communications and $1 million in losses from its non-core operations.

     The  Court  has set  dates  for  several  key  steps in the  Alliance  case
including  July 24,  1998,  as the  ballot  deadline  and July 30,  1998 for the
confirmation  hearing.  Under  the  terms of the  Plan,  the  newly  reorganized
Alliance Entertainment will become majority owned by a syndicate of banks led by
The Chase Manhattan Bank, as agent.

     "We are pleased with the progress  Alliance has made in the  reorganization
process," said Eric Weisman,  president and chief executive  officer.  "With the
support of the banks and the major creditors, we anticipate Alliance will emerge
from Chapter 11 in early August."

     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  employs  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.


