Overview and Outlook

Players Network was incorporated in the State of Nevada in March of 1993. Players Network is a global media and entertainment company engaged in the development, production, distribution and marketing of television programs and internet broadcasting about the Las Vegas and Gaming Lifestyles, and other related entertainment themes.

With an emphasis on unique, high-quality programming that captures the excitement, passion, enjoyment, sex appeal, entertainment, information, celebrity, and the non-stop adrenaline rush of the Las Vegas Gaming Lifestyle, Players Network's content goes beyond poker, casino action, sports betting, and racing, to lifestyle programs about entertainment and fine living, attracting the young and the sophisticated viewers who view digital content most.

Much of Players Network's programming is educational, involving experts helping viewers become smarter gaming consumers, so when they visit a casino they have the best chance possible to win. Many shows are celebrity driven, since so many celebrities in movies and music, TV and sports come to Las Vegas to play.

Players Network programming is conceived and produced to create successful advertising, cross-promotional and marketing opportunities for distributors and sponsors by engaging this highly targeted, desirable audience in programming that excites them.

In 2007 the Company brought on it first major sponsor IGT, who sponsored an original television series "Winner and Jackpots." The Company expects the sponsorship to continue through 2008. The sponsorship included an initial deposit and a per show production fee. The Company also engaged an advertising agency to act as the Company's representative to mainstream sponsors to assist the Company in creating advertising revenues. The Company signed distribution agreements with Telco and satellite giants AT&T and Verizon pursuant to which the Company's content will be distributed over these companies' IPTV platforms. The Company also signed agreements with Direct TV and EchoStar to deliver Players Network branded VOD channels. Management believes that the addition of these new distribution platforms will enable the Company to begin to generate revenues from advertising.

As we continue to expand our business and implement our business strategy, our current monthly cash flow requirements will exceed our near term cash flow from operations. Our available cash resources and anticipated cash flow from operations are insufficient to satisfy our anticipated costs associated with new product development. There can be no assurance that we will be able to generate sufficient cash from operations in future periods to satisfy our capital requirements. Therefore, we will have to continue to rely on external financing activities, including the sale of our equity securities, to satisfy our capital requirements for the foreseeable future. Due, in part, to our lack of historical earnings, our prior success in attracting additional funding has been limited to transactions in which our equity is used as currency. In light of the availability of this type of financing, and the lack of alternative proposals, our board of directors has determined that the continued use of our equity for these purposes may be necessary if we are to sustain operations. Equity financings of the type we have been required to pursue are dilutive to our stockholders and may adversely impact the market price for our shares. However, we have no commitments for borrowings or additional sales of equity, the precise terms upon which we may be able to attract additional funding is not known at this time, and there can be no assurance that we will be successful in consummating any such future financing transactions on terms satisfactory to us, or at all.

Results of Operations for the Years Ended December 31, 2008 and December 31, 2007:

                                       December 31,      December 31,       Increase /
                                           2008              2007           (Decrease)
Revenues                              $      299,505     $     326,159     $    (26,654 )

Direct operating costs                       202,335           313,938         (156,577 )
General and administrative expenses          348,786           322,911           25,875
Bad debt                                       8,400             2,000            6,400
Salaries and wages                           318,611           565,816         (247,205 )
Consulting services                          168,614           724,277         (573,163 )
Rent                                          76,046            69,769            6,277
Depreciation and amortization                  4,934            29,702          (24,768 )

Total Operating Expenses                   1,127,726         2,028,413          963,161

Net Operating (Loss)                        (828,221 )      (1,702,254 )       (936,507 )

Total other income (expense)                  48,272           (95,178 )        (53,474 )

Net (Loss)                            $     (779,949 )   $  (1,797,432 )   $ (1,034,983 )

Revenues:

During the years ended 2008 and 2007, we received revenues primarily from two sources - licensing fees from our private networks, including the sale of in-home media, and advertising fees, and production revenues, which included fees from third party programming production and sound stage rentals. Aggregate revenues for the year ended December 31, 2008 were $299,505 compared to revenues of $326,159 in the year ended December 31, 2007, a decrease in revenues of $26,654, or 8%. Revenues decreased as a result of a reduction in the amount of revenues received from stage rentals of $7,713 due to a decrease in demand for stage rentals in the Las Vegas area, and a reduction of $18,941 in production revenues due to fewer special video production projects in 2008.

Direct Operating Costs:

Direct operating costs were $202,335 for the year ended December 31, 2008 compared to $313,938 for the year ended December 31, 2007, a decrease of $111,603 or 36%. Our direct operating costs in 2008 decreased due to our ability to scale back our development of new video content. In 2008 we continued to develop and distribute our content, but at a slower rate than in 2007, without maximizing our sales potential in either year. Direct operating costs are comprised of video production and distribution costs.

General and Administrative:

General and administrative expenses were $348,786 for the year ended December 31, 2008 compared to $322,911 for the year ended December 31, 2007, an increase of $25,875 or approximately 8%. The increase in general and administrative expense for the year ended December 31, 2008 compared to 2007 was comprised of approximately $4,000 in professional fees, and $22,000 in marketing fees. The increase was due to the Company's increased efforts to try and promote the Company.

Bad debt:

Bad debt expense was $8,400 for the year ended December 31, 2008 compared to $2,000 for the year ended December 31, 2007, an increase of $6,400 or 31%. Bad debt expense increased for the year ended December 31, 2008 compared to 2007 due to the write off of specific uncollectible debts from a Company that that went out of business in 2008. Accounts receivable are closely managed and there were no significant unpaid accounts receivables in 2008.

Salaries and wages:

Salaries and wage expense was $318,611 for the year ended December 31, 2008 compared to $565,816 for the year ended December 31, 2007, a decrease of $247,205 or 44%. The Company recorded non-cash expenses for salaries and wages totaling $227,615 and $231,971, during the year ended December 31, 2008 and 2007, respectively. The non-cash expenses consisted of the value of common stock, recorded at fair value, issued to employees of $181,073 and $301,279 for the years ended December 31, 2008 and 2007, respectively, as well as, common stock options, recorded at fair value of $46,542 and $-0- for the years ended December 31, 2008 and 2007, respectively. Salaries and wage expenses decreased for the year ended December 31, 2008 compared to 2007 primarily because of a reduction in the issuance of common stock options to employees in 2008.

Consulting services:

Consulting services expense was $168,614 for the year ended December 31, 2008 compared to $724,277 for the year ended December 31, 2007, a decrease of $573,163 or 79%, due to a reduced reliance on outside consultants in 2008. During the years ended December 31, 2008 and 2007, the Company recorded non-cash expenses for consulting services totaling $168,614 and $717,157. The non-cash expenses consisted of the value of common stock and common stock options, recorded at fair value, issued to service providers.

Rent:

Rent expense was $76,046 for the year ended December 31, 2008 compared to $69,769 for the year ended December 31, 2007, an increase of $6,277 or 15%. Rent expense increased for the year ended December 31, 2008 compared to 2007 due to increases in the monthly rental rates associated with the new lease agreement.

Depreciation and amortization:

Depreciation and amortization expense was 4,934 for the year ended December 31, 2008 compared to $29,702 for the year ended December 31, 2007, a decrease of $24,768 or 83%. The decrease in depreciation and amortization for the year ended December 31, 2008 compared to 2007 was due to the disposal of fixed assets no longer in service during 2007.

Net Operating Loss:

Net operating loss for the year ended December 31, 2008 was $828,221 or ($0.03) per share compared to a net operating loss of $1,702,254 for the year ended December 31, 2007, or ($0.06) per share, a decrease of $874,033 or 51%. Net operating loss decreased primarily as a result of our restructuring operations and revamping cost saving measures which enabled us to greatly reduce our general and administrative costs, and our reduction in non-cash compensation payments to our Officers in 2008 compared to 2007.

Net Loss:

The net loss for the year ended December 31, 2008 was $779,949, compared to a net loss of $1,797,432 for the year ended December 31, 2007, a decrease of net loss of $1,017,483. Net loss decreased primarily as a result of our restructuring operations and revamping cost saving measures which enabled us to greatly reduce our general and administrative costs, and our reduction in non-cash compensation payments to our Officers and consultants in 2008 compared to 2007.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes total assets, accumulated deficit, stockholders' equity and working capital at December 31, 2008 compared to December 31, 2007.

                             December 31, 2008       December 31, 2007
Total Assets                $            46,353     $           104,944

Accumulated (Deficit)       $       (15,899,164 )   $       (15,119,215 )

Stockholders' Equity        $        (1,150,767 )   $          (923,532 )

Working Capital (Deficit)   $        (1,127,450 )   $          (583,531 )

Our principal source of operating capital has been provided from private sales of our common stock, revenues from operations, and, to a limited extent, debt financing. At December 31, 2008, we had a negative working capital position of $(1,127,450). As we continue the shift in our business focus and attempt to expand operational activities, we expect to continue to experience net negative cash flows from operations in amounts not now determinable, and will be required to obtain additional financing to fund operations through common stock offerings and debt borrowings to the extent necessary to provide working capital. We have and expect to continue to have substantial capital expenditure and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next 12 months. We need to raise additional cash to fund our operations and implement our business plan. We expect that the additional financing will (if available) take the form of a private placement of equity, although we may be constrained to obtain additional debt financing in lieu thereof. We are maintaining an on-going effort to locate sources of additional funding, without which we will not be able to remain a viable entity. No financing arrangements are currently under contract, and there are no assurances that we will be able to obtain adequate financing. If we are able to obtain the financing required to remain in business, eventually achieving operating profits will require substantially increasing revenues or drastically reducing expenses from their current levels or both. If we are able to obtain the required financing to remain in business, future operating results depend upon a number of factors that are outside of our control.

To conserve on the Company's capital requirements, the Company has issued shares in lieu of cash payments to employees and outside consultants, and the Company expects to continue this practice in 2009. In 2008, the Company issued 5,224,773 shares of common stock and 1,200,000 shares of preferred stock valued at $319,323 in lieu of cash payments to employees and outside consultants. The Company is not now in a position to determine an approximate number of shares that the Company may issue for the preceding purpose in 2009.