1103837--3/5/2009--CROWN_MEDIA_HOLDINGS

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{capital, credit, financial}

{investment, property, distribution}

{debt, indebtedness, cash}

{product, market, service}

{control, financial, internal}

{condition, economic, financial}

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{stock, price, operating}

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Risk Factors and Forward-Looking Statements Risks Relating to Our Business Our business has incurred net losses since inception and may continue to incur losses. Our substantial indebtedness could adversely affect our financial health, and the restrictions imposed by the terms of our debt instruments may severely limit our ability to plan for or respond to changes in our business. We have significant interest expense, which may impact our future operations. Our liquidity is dependent on external funds. There is no assurance that Hallmark Cards and its affiliates will extend dates for the deferral of payments on indebtedness owed by us or participate in any extension, refinancing or restructuring of the indebtedness. The bankruptcy of Charter Communications could affect our revenues adversely. "Most Favored Nations" provisions may require modification of existing distribution agreements which could adversely affect subscriber revenue. If we are unable to obtain programming from third parties, we may be unable to increase our subscriber base. If our programming declines in popularity, our subscriber fees and advertising revenue could fall. If we are unable to increase our advertising revenue, we may be unable to achieve improved results. Current economic conditions have resulted in softness of advertising rates and may materially adversely impact our business. Hallmark Entertainment Investments controls us and this control could create conflicts of interest or inhibit potential changes of control. We could lose the right to use the name "Hallmark" because we have limited-duration license agreements, which could harm our business. If our third-party suppliers fail to provide us with network infrastructure services on a timely basis, our costs could increase and our growth could be hindered. If we are unable to retain key executives and other personnel, our growth could be inhibited and our business harmed. The amount of our goodwill may hinder our ability to achieve profitability. Our stock price may be volatile and could decline substantially. Risks Relating to Our Industry The recent change in the television rating system in the United States could reduce our Channel revenue and our ability to achieve profitability. Competition could reduce our Channels revenue and our ability to achieve profitability. New distribution technologies may fundamentally change the way we distribute our Channels and could significantly decrease our revenue or require us to incur significant capital expenditures. Changes in laws or regulations could adversely affect our distribution and thus our revenue.

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1103837--3/5/2009--CROWN_MEDIA_HOLDINGS_INC