The increasing focus on the importance of exercise to promote health and wellness along with positive
       demographic shifts provide indicators that growth in demand for fitness services and related products and
       services will continue for the foreseeable future. With Bally's financial condition now strengthened, we are
       well positioned as the leading, and only nationwide, commercial fitness center operator to meet the 
       population's evolving fitness needs.                                                                                        
                                                                                                                            
       There is much to be done to move Bally Total Fitness forward to meet the times ahead. Our employees
       have been tireless in their efforts to achieve our goals over the past year, and I am confident those efforts
       will continue with the same relentless dedication to ensure even greater future success. Your support and
       the efforts of our employees combined for a remarkable success in 1997. Together, we can accomplish
       much more as we move toward profitability in 1998 and sustainable growth in the years ahead.

                                                                           

   Lee S. Hillman
   President and Chief Executive Officer

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