Kroenke Sports Delivers Offer to Outdoor Channel at $8.75/Share

On February 27, 2013, Kroenke Sports & Entertainment, LLC (“KSE”) delivered awritten preliminary proposal to Outdoor Channel, Inc. (“Outdoor Channel”)(Nasdaq: OUTD), proposing to acquire, on the terms and conditions set forth inthe proposal, all of the outstanding shares of common stock of OutdoorChannel, at a price of $8.75 per share in cash (representing a premium of16.7% to $7.50, the closing price of a share of Outdoor Channel's common stockon February 27, 2013).On February 28, 2013, a representative of Outdoor Channel advised arepresentative of KSE that Outdoor Channel's board of directors had determinedin good faith, after consultation with its outside legal and financialadvisors, that KSE's offer would reasonably be expected to result in aSuperior Proposal, as defined in the Agreement and Plan of Merger, dated as ofNovember 15, 2012, by and among Outdoor Channel, InterMedia Outdoors Holdings,LLC, InterMedia Outdoor Holdings, Inc., Outdoor Merger Sub, LLC and OutdoorMerger Corp (the “InterMedia Merger Agreement”), and that Outdoor Channel wasprepared to provide confirmatory due diligence to KSE and engage indiscussions with KSE, subject to entering into a confidentiality agreementwith KSE (as required by the InterMedia Merger Agreement).There can be no assurance that KSE's proposal will result in a definitiveagreement with or offer for Outdoor Channel with respect to a transaction, orof the timing of any such agreement or offer and the terms on which any suchagreement or offer may be made. KSE looks forward to working with the OutdoorChannel board of directors and its advisors in a cooperative manner to achievea mutually satisfactory transaction resulting in superior value for theOutdoor Channel stockholders. KSE has engaged Allen & Company LLC as itsfinancial advisor and Wachtell, Lipton, Rosen & Katz as its outside legalcounsel in connection with this matter.This press release shall not constitute an offer to purchase or a solicitationof an offer to purchase the common stock of Outdoor Channel or any othersecurities and shall not constitute an offer, solicitation or sale in anystate or jurisdiction in which such an offer, solicitation or sale would beunlawful.A copy of the letter from KSE to Outdoor Channel is included below:February 27, 2013Board of DirectorsOutdoor Channel Holdings, Inc.43455 Business Park DriveTemecula, CA 92590Attn: Thomas E. Hornish / Perry T. Massie / Roger L. WernerGentlemen:We are pleased to submit this preliminary proposal to acquire Outdoor ChannelHoldings, Inc., subject to the terms and conditions discussed below. Based onour knowledge of Outdoor Channel gathered from publicly available information,as well as our experience in the industry, we are prepared to acquire 100% ofthe outstanding shares of Outdoor Channel stock in an all-cash transaction, ata price of $8.75 per common share. Furthermore, we believe it will bepossible to reflect additional value in our proposal once we have completedcertain limited confirmatory due diligence on the company. We are confidentthat, given the opportunity, your stockholders will enthusiastically supportour proposal.As you may be aware, we are affiliated with Mr. E. Stanley Kroenke, thechairman and owner of The Kroenke Group, a private real estate investment anddevelopment company with properties located throughout the United States andCanada, as well as one of the leading owners in professional sports. Mr.Kroenke is the owner of the St. Louis Rams of the NFL, the majority owner ofthe Arsenal Football Club of the EPL, the owner of the Denver Nuggets of theNBA, the owner of the Colorado Avalanche of the NHL and the owner of theColorado Rapids of the MLS. Mr. Kroenke also owns and operates sports andentertainment venues in Colorado, including the Pepsi Center, Dick's SportingGoods Park and the Paramount Theatre. In television operations, Mr. Kroenkeowns Altitude Sports & Entertainment, a regional television network based inDenver, Colorado and 50% of World Fishing Network, which operates primarilyout of the Altitude network operating center in Centennial, Colorado.As these investments and experiences demonstrate, we are well positioned toexecute on our proposal and complete a transaction with your company. Inaddition, we and Mr. Kroenke are highly impressed with your company and areeager to partner for a transaction; Mr. Kroenke, in fact, personally owns 1.25million shares of your common stock.We believe our proposal constitutes not only an “Alternative Proposal” butalso a “Superior Proposal” pursuant to your merger agreement with InterMediaOutdoors Holdings, Inc. Our proposal represents a premium of 16.7% to $7.50,the closing price of a share of the company's common stock today, February 27,2013, and a premium of 21.7% to $7.19, the closing price on November 15, 2012(the last trading day before announcement of the InterMedia transaction).Our purchase price of $8.75 per share is plainly more favorable, from afinancial point of view, to the company's stockholders than the cash price of$8.00 per share that the company's stockholders may elect under the mergeragreement. Furthermore, we are confident that the same holds true in comparingour purchase price against either (a) the one share of InterMedia common stockinto which a share of Outdoor Channel stock may be converted or (b) the $4.46in cash plus 0.443 portion of a share of InterMedia common stock into which ashare of Outdoor Channel stock may be converted. In fact, the analysis of thefairness opinion of Lazard Fréres & Co. LLC, as described in your proxystatement, fully supports our conclusion that our proposal of $8.75 per sharein cash is financially more favorable than the blended value of the InterMediamerger consideration.Put simply, compared to the merger agreement with InterMedia, ourall-shares/all-cash proposal provides clear, immediate value for all companystockholders, without imposing a cutback on the amount of cash any singlestockholder could receive and without forcing stockholders to retain a stubminority equity security of uncertain value (in a company in which formerindependent public stockholders are likely to represent less than 21% of thetotal equity).Our proposal is subject only to completion of limited confirmatory duediligence (which we are prepared to commence immediately) and execution of adefinitive merger agreement; likewise, we will deliver high certainty ofclosing and see no regulatory impediments to a prompt closing. We anticipatethat our merger agreement will be based substantially on your existing mergeragreement with InterMedia, although our proposed agreement would be morefavorable to the company's stockholders in two important respects.First, our proposed merger agreement would not have any uncertainty tied tofinancing. We are a financially strong company and have the necessaryresources to consummate this transaction; while we may seek bank financing, wedo not require it and we would not propose to place the risk of such financingon your stockholders. By contrast, as you well know, your merger agreementwith InterMedia provides that you are not entitled to seek specificperformance to cause InterMedia to close unless, among other conditions,approximately $150 million in new debt financing has been (or will be) funded.Second, unlike your merger agreement with InterMedia, our proposed mergeragreement would not cap your ability to seek monetary damages (or specificperformance) in the event we were to willfully breach the agreement. Theseimproved terms show our commitment to completing a transaction with yourcompany.We want to emphasize to the Outdoor Channel board of directors how serious weare about this proposal and how committed we are to a combination of our twocompanies. We have already engaged Allen & Company LLC as our financialadvisor and Wachtell, Lipton, Rosen & Katz as our legal advisor, and they areprepared to begin work immediately to assist us in completing our limitedconfirmatory due diligence and to finalize an agreed transaction. In light ofthe stockholder meeting on March 13, 2013 to consider the InterMedia mergeragreement, we believe it is in the best interests of all parties to begindiscussions immediately, so you and your stockholders will be able to takefull advantage of the value represented by our proposal. We (and our advisors)stand fully ready to commit the resources necessary to complete these stepsexpeditiously, and we are prepared to enter into a confidentiality agreementwith you on the terms required by Section 9.3 of your merger agreement withInterMedia.We have great respect for Outdoor Channel and the accomplishments of yourmanagement team and employees and are excited by the prospects of buildingtogether on your strong foundation. We are confident in our ability to combinesuccessfully our two companies to enhance opportunities for growth, which iswhy we are able to make this proposal of superior value for your stockholders.Please note that this letter is not meant to, and does not, create orconstitute any legally binding obligation, liability or commitment by usconcerning a proposed transaction, and, other than any confidentialityagreement we may enter into with you, there will be no legally bindingagreement between us regarding the proposed transaction unless and until weenter into a definitive merger agreement with you.We are pleased to be able to offer this Superior Proposal to yourstockholders. We are confident that our proposal presents a compellingopportunity for both our companies and look forward to your response; due tothe short time before the March 13, 2013 stockholder meeting, we wouldappreciate your response before 5:00 p.m. (New York time) on Friday, March 1,2013. If you have any questions or would like to clarify any aspect of ourproposal, please do not hesitate to call either Paul Gould at Allen & Company,at (212) 339-2283, or Andrew Nussbaum at Wachtell, Lipton, Rosen & Katz, at(212) 403-1269.Sincerely,Kroenke Sports & Entertainment, LLCBy: /s/ James A. MartinName: James A. MartinTitle: President and Chief Executive Officer