Gaylord Entertainment Exiting Internet Business; Company Announces New Organizational Structure With Two Operating Groups

December 5, 2000

NASHVILLE, Tenn.--(BUSINESS WIRE)--Dec. 5, 2000--Gaylord Entertainment Company (NYSE:GET) is exiting operations at its centralized Internet initiative, Gaylord Digital, and anticipates the sale or closure of its various components by December 31, the Company announced today.

The positions of 85 Gaylord Digital employees will be eliminated, and the conclusion of operations will result in non-recurring charges currently anticipated to be approximately $35 million net of taxes in the fourth quarter of 2000. Through the first nine months of 2000, the investment in Gaylord Digital resulted in negative operating cash flow of $16.8 million, contributing to the parent company's negative operating cash flow of $10.9 million for that period.

"This action at Gaylord Digital results from our previously announced strategic review and reflects our continuing efforts to focus on our core assets. That review continues, and our over-arching goal is to immediately strengthen profitability in all areas of our company," said Dennis Sullivan, president and chief executive officer.

Transactions involving Gaylord Digital components such as Musicforce.com and Lightsource.com are in negotiation. Proceeds from these transactions, if consummated, are not expected to materially affect the amount of the nonrecurring charges mentioned above. Musicforce.com, primarily an e-commerce site, and Lightsource.com, an Internet broadcasting site, were the two original components of Gaylord Digital.

In addition to announcing the Gaylord Digital move, the company also announced a new organizational structure with two operating groups - hospitality and attractions, and music, media and entertainment.

"For the past year, we operated with three groups - hospitality and attractions, creative content and interactive media. Exiting Gaylord Digital narrows the scope of interactive media, and we believe it makes sense to integrate that group's remaining businesses with creative content. Renaming it 'music, media and entertainment' describes the nature of the group going forward," Sullivan said.

"Organizing the company into these two operating groups positions us well for the future and will permit us to be more focused and efficient," he continued.

In addition to the eliminated positions at Gaylord Digital, the company announced that another 31 positions have been cut in various areas of the company as part of the ongoing operational review.

The newly created music, media and entertainment group is led by Carl Kornmeyer as its president. Kornmeyer most recently was the Company's executive vice president for corporate and operational development. Dave Jones continues in his role as president of the hospitality and attractions group.

Kornmeyer joined the Company in 1974 and began his career in the entertainment industry at WSM Radio and WSM-TV in 1980. He has served in a variety of executive roles and was part of the original team that created and built TNN: The Nashville Network and previously was president of the Company's media businesses.

The music, media and entertainment group is anchored by Acuff-Rose Music Publishing, the and its related businesses, Word Entertainment and radio stations WSM-AM, WSM-FM and WWTN-FM.

Jones joined the Company in 1998. His career in the hospitality industry began in 1966 and immediately before joining Gaylord Entertainment, he was president and chief executive officer of John Q. Hammons Hotels Inc., which he had helped expand to 44 properties.

The most prominent components of the hospitality and attractions group are the 2,884-room Opryland Hotel Nashville; the 1,400-room Opryland Hotel (opening Feb. 2, 2002, in Osceola County, Florida, near Orlando); and the 1,500-room Opryland Hotel Texas (opening in 2003 in Grapevine, Texas).

"Our focus is on building lasting value for our shareholders as we fulfill our vision of being a premiere hospitality and entertainment company creating memorable experiences that make a positive difference in people's lives," Sullivan said.

Serving with Sullivan in corporate executive roles are Denise Wilder Warren, senior vice president and chief financial officer, and Eric Westin, senior vice president of the development group. Within the music, media and entertainment group are Jerry Bradley, president of Acuff-Rose Music Publishing; Malcolm Mimms, president of Word Entertainment; Steve Buchanan, president of the Grand Ole Opry Group; and Brian Payne, president of Interactive Media.

The closing of Gaylord Digital and the new organizational structure discussed in this announcement are part of an ongoing assessment of the Company's strategic alternatives, including its cable networks operations. The effects of this ongoing review may result in additional material adverse effects on the Company's results of operations and financial position.

This press release contains certain forward-looking statements regarding, among other things, the ability to consummate transactions for the sale of Musicforce.com and Lightsource.com, the ability of the company to operate more efficiently under the revised organizational structure, and the ability of the company to open its hotels under construction on schedule. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company cautions investors that future financial and operating results may differ materially from those projected in forward- looking statements made by, or on behalf of, the Company. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The Company's future operating results depend on a number of factors which were derived utilizing numerous assumptions and other important factors that, if altered, could cause actual results to differ materially from those projected in forward-looking statements. These factors, many of which are beyond the Company's control, include the ability of the Company to successfully finance, develop and operate hotel properties in other markets; competition; the impact of weather on construction schedules; and the Company's ability to obtain long-term financing on acceptable terms.

Gaylord Entertainment is a diversified entertainment company headquartered in Nashville, . It stock is traded on the New York Stock Exchange (symbol:GET).

CONTACT: Gaylord Entertainment Company Media Contact: Tom Adkinson, 615/316-6302 [email protected] or Investor Contact: J. Russell Worsham, 615/316-6564 [email protected]