UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 2)

Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:

þ		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12

Ascent Media Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
	(2)		Aggregate number of securities to which transaction applies:
	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)		Proposed maximum aggregate value of transaction: $113,250,000
	(5)		Total fee paid: $8,075

þ		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:
			Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

Information in this proxy statement is not complete and may be changed.
This proxy statement does not constitute an offer to sell or a solicitation of an offer to buy any securities.

Subject to completion, dated [                    ], 2011

[insert appropriate logo]

ASCENT MEDIA CORPORATION
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5622

Dear Stockholder:

January [25], 2011

          We cordially invite you to attend a special meeting of the stockholders of Ascent Media Corporation (the Company), which will be held at 10:00 a.m., local time, on February 24, 2011 at the Fairmont Miramar Hotel, 101 Wilshire Boulevard, Santa Monica, California 90401, telephone (800) 257-7544.

          At the special meeting, you will be asked to consider and vote on a proposal to approve the sale of our content distribution business unit to Encompass Digital Media, Inc. and its direct, wholly-owned subsidiary Encompass Digital Media Limited, pursuant to the Purchase and Sale Agreement described in the attached proxy statement, for a purchase price of $113,250,000 in cash, plus the assumption of certain liabilities and obligations with an estimated value on the date of the Purchase and Sale Agreement of approximately $6.75 million. The purchase price is subject to net working capital and certain other adjustments. The sale of our content distribution business unit, which we refer to as the Content Distribution transaction, is subject to customary conditions, including regulatory approvals. Subject to stockholder approval, we expect the transaction to close in the first quarter of 2011.

          The Content Distribution transaction is part of the previously-announced strategy of your company and its board of directors to maximize the value of the Company to its stockholders. On December 31, 2010, we completed the previously announced sale of our creative services business unit and media management services business unit, which we refer to as the Creative/Media transaction, to Deluxe Entertainment Services Group Inc. and its direct, wholly-owned subsidiary, Deluxe UK Holdings Limited, for a purchase price of approximately $67.3 million in cash, after giving effect to a working capital adjustment of approximately $1.0 million, plus the assumption of certain net indebtedness in the amount of approximately $1.8 million.

          The sale of our content distribution business unit, following the closing of the sale of our creative services and media management services business units, may constitute a “sale of all or substantially all of the property and assets” of the Company under Delaware law. We are therefore seeking shareholder approval for the Content Distribution transaction. We are not seeking shareholder approval for the Creative/Media transaction, and the Content Distribution transaction was not conditioned on the closing of the Creative/Media transaction. They are separate, independent transactions. The proceeds of the Content Distribution transaction and the Creative Media transaction, after transaction expenses, will be used for general corporate purposes, which may include potential acquisitions. We do not intend to distribute any of these proceeds to our stockholders at this time.

           On December 17, 2010, your company acquired 100% of Monitronics International, Inc., a leading national security alarm monitoring company, in a transaction valued at $1.191 billion, exclusive of certain hedge related and other liabilities, but including the assumption of Monitronics’ existing structured financing. The transaction value is comprised of cash consideration of $413 million and $778 million in net debt of Monitronics. Monitronics is a subscription-based business that delivers solid, predictable revenue and cash flow, and we are pleased to welcome its highly-regarded management to Ascent. The Monitronics acquisition is not subject to shareholder approval and is not contingent upon the divestiture of the content distribution business. However, following the Content Distribution transaction and the Creative/Media transaction, Monitronics will constitute the primary operating business of Ascent. Accordingly, this proxy statement includes certain financial and other information about Monitronics and a description of the Monitronics transaction.

          Your board of directors has unanimously approved the Content Distribution transaction as described in the proxy statement, has declared the Purchase and Sale Agreement and the transaction to be advisable, fair to, and in the best interests of the Company and its stockholders, and recommends that you vote “FOR” the proposal to approve that transaction.

          Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the special meeting, please vote as soon as possible to make sure that your shares are represented.

          Thank you for your continued support and interest in our company.

Very truly yours,

 
William R. Fitzgerald
Chairman and Chief Executive Officer

          This proxy statement is dated January [25], 2011 and is first being mailed to stockholders on or about January [26], 2011 to the stockholders of record as of 5:00 p.m., New York City time, on January 24, 2011.

ASCENT MEDIA CORPORATION
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5622

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
to be Held on February 24, 2011

          NOTICE IS HEREBY GIVEN of the special meeting of stockholders of Ascent Media Corporation (the Company) to be held at 10:00 a.m., local time, on February 24, 2011 at the Fairmont Miramar Hotel, 101 Wilshire Boulevard, Santa Monica, California 90401, telephone (800) 257-7544, to consider and vote on the following proposal:

1.

A proposal (the transaction proposal) to approve the sale of 100% our content distribution business unit, which under Delaware law may constitute the sale of “all or substantially all of the property and assets” of the Company, to Encompass Digital Media, Inc. and its direct wholly-owned subsidiary Encompass Digital Media Limited (together, Encompass) on the terms and subject to the conditions set forth in the Purchase and Sale Agreement dated December 2, 2010, attached as Annex B to this proxy statement (the Purchase Agreement). Pursuant to the Purchase Agreement, we will sell all our interest in certain of our subsidiaries, which, following an internal reorganization, will at closing hold in the aggregate the worldwide assets and operations of our content distribution business unit, to Encompass for a purchase price of $113,250,000 in cash, plus the assumption of certain liabilities and obligations with an estimated value on the date of the Purchase Agreement of approximately $6.75 million, subject to net working capital and certain other adjustments.

          We describe the transaction proposal in more detail in the accompanying proxy statement, including a description of our content distribution business unit and a summary of the terms and conditions of the Purchase Agreement. We encourage you to read the proxy statement in its entirety before voting, including the historical financial statements of our content distribution business unit attached as Annex A-1, the pro forma financial statements of the Company attached as Annex A-2, the Purchase Agreement attached as Annex B, and the opinion of Moelis & Company LLC, independent financial advisors to the Company, attached as Annex C.

          Holders of record of our Series A common stock, par value $.01 per share, and Series B common stock, par value $.01 per share (collectively, the common stock), outstanding as of 5:00 p.m., New York City time, on January 24, 2011, the record date for the special meeting, are entitled to notice of the special meeting and to vote at the special meeting or any adjournment thereof. Votes may be cast in person or by proxy at the special meeting or prior to the meeting by telephone or via the Internet.

          Approval of the transaction proposal requires the affirmative vote of the holders of record, as of the record date, of a majority of the aggregate voting power of the shares of our common stock outstanding and entitled to vote at the special meeting, voting together as a single class. Our obligation to consummate the sale of our content distribution business is conditioned on stockholder approval.

          Your board of directors has unanimously approved the Purchase Agreement and the transaction proposal and declared them advisable, fair to, and in the best interests of the Company and its stockholders and recommends that you vote “FOR” the proposal.

          A list of stockholders entitled to vote at the special meeting will be available at our offices in Englewood, Colorado for review by our stockholders, for any purpose germane to the special meeting, for at least 10 days prior to the special meeting.

          YOUR VOTE IS IMPORTANT. We urge you to vote as soon as possible by telephone, Internet or mail.

By order of the board of directors,

 
William E. Niles

Executive Vice President,
General Counsel and Secretary

Englewood, Colorado

January [25], 2011

Please execute and return the enclosed proxy promptly, whether or not you intend to be present at the special meeting.

HOW YOU CAN OBTAIN ADDITIONAL INFORMATION

          Our company is subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended (Exchange Act). In accordance with the Exchange Act, we file periodic reports and other information with the Securities and Exchange Commission (SEC). This proxy statement incorporates important business and financial information about our company from documents that we file with the SEC but are not being delivered with this proxy statement. This information is available to you without charge upon your written or oral request. You can obtain copies of documents we file with the SEC, including the documents incorporated by reference in this proxy statement, through the SEC website at http://www.sec.gov or by contacting us by writing or telephoning the office of Investor Relations as follows:

Ascent Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Telephone: (720) 875-5622

          If you would like to request any documents from us please do so by February 14, 2011, in order to receive them before the special meeting. If you request any documents, they will be mailed to you by first class mail, or another equally prompt means, within one business day after your request is received.

Table of Contents

SUMMARY			1
Our Company			1
Parties to the Transaction			1
The Content Distribution Transaction			2
The Purchase Agreement			5
Regulatory Matters			6
Recent Developments			6
QUESTIONS AND ANSWERS			8
SELECTED FINANCIAL DATA FOR ASCENT MEDIA CORPORATION			12
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS			13
THE SPECIAL MEETING			15
Time, Place and Date			15
Purpose			15
Quorum			15
Required Vote			15
Who May Vote			16
Votes You Have			16
Shares Outstanding			16
Number of Holders			16
Voting Procedures for Record Holders			16
Voting Procedures for Shares Held in Street Name			17
Revoking a Proxy			17
Solicitation of Proxies			17
THE COMPANY			18
Background			18
Corporate Strategy			18
AMG — Content and Creative Services			18
Recent Developments			19
Content Distribution			19
Media Services			20
Creative Services			20
Systems Integrations			21
Effect of the Content Distribution Transaction			21
THE TRANSACTION PROPOSAL			22
Reasons for the Content Distribution transaction			22
Background of the Content Distribution transaction			23
Recommendation of Our Board of Directors			25
Opinion of Our Financial Advisor			26
Timing and Likelihood of Closing of the Content Distribution transaction			32
Proceeds from the Content Distribution transaction			32
Effects of the Content Distribution transaction			33
The Purchasers — Encompass Digital Media, Inc. and Encompass Digital Media Limited			33
Past Contacts, Transactions or Negotiations			34
Other Agreements and Transactions Related to the Content Distribution transaction			35
Accounting Treatment of the Content Distribution transaction			35
Risk Factors			36
Interests of Our Directors and Executive Officers in the Content Distribution transaction			38
No Appraisal Rights			38
Financing; Source and Amount of Funds			38
Vote and Recommendation			39
MATERIAL TAX CONSEQUENCES			40
Certain United States Federal Income Tax Consequences			40
Certain United Kingdom Tax Consequences			40
Certain Singapore Tax Consequences			40

REGULATORY MATTERS			40
THE PURCHASE AND SALE AGREEMENT			42
The Content Distribution transaction			42
Purchase Price			43
Closing Date			44
Conditions to the Transaction			44
Representations and Warranties			46
Certain Covenants and Agreements			47
Tax Matters			50
Employee Matters			50
Indemnification; Survival of Indemnification Obligations			51
Termination			51
Termination Fees			52
Reverse Termination Fee			52
Amendment			52
Waiver			52
Specific Performance			52
THE CREATIVE/MEDIA TRANSACTION			54
Deluxe			54
Creative/Media Transaction			54
Purchase Price			54
Certain Covenants and Agreements			55
Indemnification			56
ACQUISITION OF MONITRONICS			58
Monitronics Merger Agreement			58
The Monitronics Business			62
Acquisition Financing			64
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			65
Security Ownership of Certain Beneficial Owners			65
Security Ownership of Management			66
Changes in Control			68
ADDITIONAL INFORMATION			68
Delivery to Stockholders Sharing an Address			68
Shareholder Proposals			69
Where You Can Find Additional Information			69
ANNEXES
ANNEX A: Financial Statements
Annex A-1. Combined Financial Statements for the Content Distribution business (unaudited)			A-1-1
Annex A-2. Selected Pro Forma Condensed Combined Financial Information (unaudited)			A-2-1
Annex A-3. Audited consolidated financial statements of Monitronics International, Inc. for the years ended June 30, 2010, 2009 and 2008			A-3-1
Annex A-4. Interim financial statements of Monitronics International, Inc. for the three months ended September 30, 2010 and 2009 (unaudited)			A-4-1
ANNEX B: Purchase and Sale Agreement			B-1
ANNEX C: Opinion of Moelis & Company LLC			C-1

SELECTED FINANCIAL DATA FOR ASCENT MEDIA CORPORATION

          The following tables present selected historical information relating to our Company’s financial condition and results of operations for each of the years in the five-year period ended December 31, 2009. During the third quarter of 2010, our company shut down its Global Media Exchange (GMX) business, which had previously been included in our content services group. GMX has been reclassified as discontinued operations, and this reclassification is reflected in the 2009 and 2008 columns as indicated in the footnotes to the table below. The following data have been derived from our audited consolidated financial statements for each of the respective periods, as adjusted to treat GMX as discontinued operations, and should be read in conjunction with our consolidated financial statements and related notes incorporated by reference into this proxy statement. See “Additional Information — Where You Can Find Additional Information” below.

		December 31,
		2009				2008				2007				2006				2005
						amounts in thousands
Summary Balance Sheet Data:
Current assets		$	416,891				490,042				362,725				316,381				385,868
Property and Equipment, net		$	185,891				211,846				241,834				251,670				230,742
Total assets		$	682,483				745,304				830,986				952,919				996,627
Current liabilities		$	70,872				91,202				119,600				114,229				84,783
Stockholders’ equity		$	582,596				625,310				686,896				814,696				890,029

		Years ended December 31,
		2009				2008				2007				2006				2005
		amounts in thousands,
		except per share amounts
Summary Statement of Operations Data:
Net revenue		$	453,681				581,625				570,731				553,326				585,049
Operating income (loss) (a) (c)		$	(39,559	)			(120,956	)			(175,740	)			(118,244	)			2,533
Net earnings (loss) from continuing operations (a) (c)		$	(56,844	)			(114,070	)			(151,202	)			(92,334	)			5,703
Net earnings (loss) (a)		$	(52,897	)			(64,619	)			(132,331	)			(83,007	)			8,970
Basic and diluted earnings (loss) per common share (b)		$	(3.76	)			(4.60	)			(9.41	)			(5.90	)			0.64

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

               Certain statements in this proxy statement or in the documents incorporated by reference herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business, marketing and operating strategies, our market potential, our strategy of divesting our historical operating businesses and acquiring one or more other operating businesses that management believes will offer more attractive returns on equity, the likelihood of our closing the Content Distribution transaction and the expected closing dates therefor, and other matters. In particular, statements under “Summary,” “The Transaction Proposal,” “The Company—Corporate Strategy,” and “Material Tax Consequences” contain forward-looking statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated:

	•		the occurrence of any event, change or other circumstance that could give rise to the termination of the Purchase Agreement;
	•		the outcome of any legal proceedings that may be instituted against the Company, Encompass and others relating to the Purchase Agreement;
	•		any inability to complete the Content Distribution transaction due to the failure to obtain stockholder approval or the failure to satisfy any other conditions set forth in the Purchase Agreement;
	•		the failure of the Content Distribution transaction to close for any other reason;
	•		business risks and uncertainties inherent in the development of new business lines and business strategies;
	•		business risks and uncertainties inherent in the integration of Monitronics and any other acquired businesses;
	•		the possibility that any business or entity acquired by the Company in connection with its acquisition strategy may have unanticipated or undisclosed liabilities or obligations;
	•		the significant degree of financial leverage contemplated by the Monitronics business model;
	•		competition from other alarm monitoring companies and potential new entrants into the business such as cable and telephone providers, many of whom have substantially greater resources than we do;
	•		general economic and business conditions and industry trends;
	•		the regulatory environment of the industries in which we, and the entities in which we have interests, operate;
	•		retention of our largest customer and dealer accounts;
	•		uncertainties associated with product and service development and market acceptance;
	•		rapid technological changes;

	•		present and future financial performance, including availability and terms of capital;
	•		fluctuations in foreign currency exchange rates;
	•		political unrest in international markets;
	•		the ability of suppliers and vendors to deliver products, equipment, software and services;
	•		the outcome of any pending or threatened litigation;
	•		availability of qualified personnel;
	•		changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the FCC, and adverse outcomes from regulatory proceedings;
	•		changes in the nature of key strategic relationships with partners and joint venturers;
	•		competitor and overall market response to our products and services including acceptance of the pricing of such products and services;
	•		threatened terrorists attacks and ongoing military action in the Middle East and other parts of the world; and
	•		risk of loss from earthquakes and other catastrophic events.

               These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this proxy statement (or, as to documents incorporated by reference, the date of such documents), and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein or therein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based. When considering such forward-looking statements, you should keep in mind the factors described in “The Transaction Proposal—Risk Factors” and other cautionary statements contained in this proxy statement or incorporated by reference in this proxy statement. Such risk factors and statements describe circumstances which could cause actual results to differ materially from those inferred by any forward-looking statement.

THE SPECIAL MEETING

Time, Place and Date

          The special meeting of the stockholders is to be held at 10:00, local time, on February 24, 2011, at the Fairmont Miramar Hotel, 101 Wilshire Boulevard, Santa Monica, California 90401, telephone (800) 257-7544.

Purpose

          At the special meeting, holders of our common stock will be asked to consider and vote on a proposal, which we refer to as the transaction proposal, to approve the sale of 100% of our content distribution business unit to Encompass for $113,250,000 in cash, plus the assumption of certain liabilities and obligations with an estimated value on the date of the Purchase Agreement of approximately $6.75 million, and subject to net working capital and other adjustments, on the terms and subject to the conditions set forth in the Purchase Agreement. The proposed sale of our content distribution business unit as described in this proxy statement, following the previously completed sale of our creative services business unit and media management services business unit, may constitute a sale of “all or substantially all” of the property and assets of the Company under Delaware law. Hence, it requires stockholder approval, and stockholder approval is a condition to the closing of the transaction under the Purchase Agreement.

          Please see “The Transaction Proposal” for more information.

Quorum

          To conduct the business of the special meeting, our bylaws require that the holders of a majority of the aggregate voting power represented by the shares of our common stock outstanding on the record date and entitled to vote be present in person or by proxy at the special meeting. For purposes of determining a quorum, your shares will be included as represented at the meeting even if you indicate on your proxy that you abstain from voting. If a broker, who is a record holder of shares, indicates on a form of proxy that the broker does not have discretionary authority to vote those shares on the transaction proposal, or if those shares are voted in circumstances in which proxy authority is defective or has been withheld, those shares will be considered broker non-votes and will not be counted for purposes of determining the presence of a quorum. See “—Voting Procedures for Shares Held in Street Name—Effect of Broker Non-Votes” below. Rules applicable to all brokers that are members of the New York Stock Exchange prohibit discretionary voting by brokers with respect to the transaction proposal. If a quorum is not present at the special meeting, we expect the chairman of the meeting to adjourn the meeting in accordance with the terms of our bylaws for the purpose of soliciting additional proxies.

Required Vote

          Approval of the transaction proposal requires the affirmative vote of the holders of record, as of the record date, of a majority of the aggregate voting power of the shares of our common stock outstanding and entitled to vote at the special meeting, voting together as a single class. Each holder of a share of our Series A common stock is entitled to one vote per share and each holder of a share of our Series B common stock is entitled to ten votes per share on the transaction proposal.

          Failure to vote by proxy (by returning a properly executed proxy card or by following the instructions printed on the proxy card for telephone or Internet voting) or in person has the same effect as a vote “AGAINST” the transaction proposal, and will not be treated as present for the purpose of establishing a quorum. Abstentions will be treated as present for the purpose of establishing a quorum. However, since approval of the transaction proposal requires the affirmative vote of the holders of a majority of the aggregate voting power of the shares of our common stock outstanding and entitled to vote at the special meeting, abstentions will have the same effect as votes “AGAINST” the proposal.

          You are urged to vote by proxy even if you plan to attend the special meeting so that we will know as soon as possible that enough votes will be present for the special meeting to be held.

          As of the record date for the special meeting, our directors and executive officers beneficially owned approximately [4.1] % of the total voting power of the outstanding shares of Series A common stock and approximately [84.5] % of the total voting power of the outstanding shares of Series B common stock, for a total

aggregate voting power of [32.2]%. We have been informed that all of our executive officers and directors intend to vote “FOR” the transaction proposal.

Who May Vote

          Holders of shares of our Series A common stock and Series B common stock, as recorded in our stock register as of 5:00 p.m., New York City time, on January 24, 2011, the record date for the special meeting, may vote on the transaction proposal at the special meeting or at any adjournment thereof. The holders of the Series A common stock and the Series B common stock shall vote together on the transaction proposal as a single class.

Votes You Have

          At the special meeting:

	•		holders of shares of Series A common stock will have one vote per share; and
	•		holders of shares of Series B common stock will have ten votes per share;

in each case, for each share that our records show they owned as of the record date.

Shares Outstanding

          As of January 24, 2011, the record date for the special meeting, an aggregate of [13,625,391] shares of Series A common stock and [731,630] shares of Series B common stock were issued and outstanding and entitled to vote at the special meeting.

Number of Holders

          There were, as of the record date for the special meeting, approximately [1,191] record holders of Series A common stock and approximately [66] record holders of Series B common stock (which amounts do not include the number of stockholders whose shares are held of record by banks, brokers or other nominees, but include each such institution as one holder).

Voting Procedures for Record Holders

          Holders of record of our common stock as of the record date for the special meeting may vote in person at the special meeting. Alternatively, they may give a proxy by completing, signing, dating and returning the enclosed proxy card by mail, or by voting by telephone or through the Internet. Instructions for voting by using the telephone or the Internet are printed on the proxy voting instructions attached to the proxy card. In order to vote through the Internet, holders should have their proxy cards available so they can input the required information from the card, and log into the Internet website address shown on the proxy card. When holders log on to the Internet website address, they will receive instructions on how to vote their shares. The telephone and Internet voting procedures are designed to authenticate votes cast by use of a personal identification number, which will be provided to each voting stockholder separately. Unless subsequently revoked, shares of common stock represented by a proxy submitted as described herein and received at or before the special meeting will be voted in accordance with the instructions on the proxy.

          YOUR VOTE IS IMPORTANT. It is recommended that you vote by proxy even if you plan to attend the special meeting. You may change your vote at the special meeting.

          If a proxy is signed and returned by a record holder without indicating any voting instructions, the shares of common stock represented by the proxy will be voted “FOR” the approval of the transaction proposal.

          If you submit a proxy card on which you indicate that you abstain from voting, it will have the same effect as a vote “AGAINST” the transaction proposal.

          If you fail to respond with a vote, your shares will not be counted as present and entitled to vote for purposes of determining a quorum, and your failure to vote will have the same effect as a vote “AGAINST” the transaction proposal.

Voting Procedures for Shares Held in Street Name

          General. If you hold your shares in the name of a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee when voting your shares of common stock or when granting or revoking a proxy.

          Effect of Broker Non-Votes. As a result of applicable New York Stock Exchange rules, brokers will not have discretionary authority to vote on the transaction proposal at the special meeting. Broker non-votes will not count as shares of common stock present and entitled to vote for purposes of determining a quorum. In addition, since the transaction proposal requires the affirmative vote of a majority of all shares outstanding and entitled to vote as of the record date, voting together as a single class, broker non-votes have the same effect as votes “against” the transaction proposal (if a quorum is present). You should follow the directions your broker, bank or other nominee provides to you regarding how to vote your shares of common stock or when granting or revoking a proxy.

Revoking a Proxy

          Before the start of the special meeting, you may change your vote by voting in person at the special meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to Ascent Media Corporation, c/o Computershare Trust Company, N.A., 250 Royall Street, Canton, MA 02021. Any proxy revocation or new proxy must be received before the start of the special meeting. In addition, you may change your vote through the Internet or by telephone (if you originally voted by the corresponding method) not later than 12:00 a.m., New York City time, on February 24, 2011.

          Your attendance at the special meeting will not, by itself, revoke your proxy.

          If your shares are held in an account by a broker, bank or other nominee, you should contact your nominee to change your vote.

Solicitation of Proxies

          The accompanying proxy for the special meeting is being solicited on behalf of our board of directors. In addition to this mailing, our employees may solicit proxies personally or by telephone. We pay the cost of soliciting these proxies. We have engaged Georgeson Inc. (Georgeson) to assist in the solicitation of proxies from brokers, nominees, fiduciaries and other custodians. We will pay Georgeson a fee of approximately $9,000. We have also agreed to reimburse Georgeson for reasonable administrative and out-of-pocket expenses incurred in connection with the proxy solicitation and indemnity Georgeson against certain losses, costs and expenses. We also reimburse brokers and other nominees for their expenses in sending these materials to you and getting your voting instructions.

THE COMPANY

Background

          The Company was incorporated in the state of Delaware on May 29, 2008 as a wholly-owned subsidiary of Discovery Holding Company (DHC). On September 17, 2008, DHC completed a spin-off of the Company to DHC’s shareholders and we became an independent, publicly traded company.

          We are a holding company. Our principal assets include our wholly owned operating subsidiary Monitronics, the Content Distribution business, and cash and cash equivalents. We also own certain real estate interests in Los Angeles and the UK, the SI business, which we consider non-core, and assets used in the operation of our corporate and support functions.

Corporate Strategy

          As previously announced, we actively seek opportunities to create value for our stockholders by leveraging our strong capital position through strategic acquisitions and other potential transactions in various industries. As part of this strategy, we have been seeking to divest the businesses that historically have been operated by AMG and to acquire one or more other operating businesses that we believe offer the opportunity for more attractive returns on equity. In evaluating potential acquisition candidates we consider various factors, including among other things:

	•		financial characteristics, including recurring revenue streams and free cash flow;
	•		growth potential; and
	•		potential return on investment incorporating appropriate financial leverage, including the target’s existing indebtedness and opportunities to restructure some or all of that indebtedness.

          We consider acquisitions for cash, leveraged acquisitions, and acquisitions using Ascent Media Corporation stock. In addition to acquisitions, we consider majority ownership positions, minority equity investments and, in appropriate circumstances, senior debt investments that we believe provide either a path to full ownership or control, the possibility for high returns on investment, or significant strategic benefits.

          Consistent with our previously announced acquisition strategy, we consummated the Monitronics acquisition on December 17, 2010. Monitronics provides monitored business and home security system services to more than 665,000 subscribers in the United States and Canada, through a nationwide network of independent authorized dealers. Monitronics is a subscription-based business that delivers solid, predictable revenue and cash flow and has what we believe is a scalable and leveragable business model. Additional information regarding Monitronics, including the principal terms of the acquisition agreement, are described in this proxy statement under the caption “Acquisition of Monitronics”.

          Our acquisition strategy entails substantial risk. We consider potential acquisitions in a variety of industries, which could result in significant additional changes in our operations from those historically conducted by us. Please see “The Transaction Proposal—Risk Factors,” below.

AMG — Content and Creative Services

          Prior to the consummation of the Creative/Media transaction and the Monitronics transaction, each of which is described below, we were primarily engaged in the business of providing content and creative services to the media and entertainment industries through our wholly-owned subsidiaries. The business units that provided such services, which we refer to as the AMG businesses, were owned by our wholly-owned subsidiary, AMG, and its wholly-owned subsidiaries. The AMG businesses provided a wide variety of creative services and content management and delivery services to the media and entertainment industries from facilities in the United States, the United Kingdom and Singapore. The AMG businesses provided solutions for the creation, management and distribution of content to major motion picture studios, independent producers, broadcast networks, programming networks, advertising agencies and other companies that produce, own and/or distribute entertainment, news, sports and advertising content. The AMG businesses also provided solutions for the management and distribution of content to multichannel video programming distributors such as cable operators and IPTV providers. Services were marketed to target industry segments through AMG’s internal sales force and could be sold on a bundled or individual basis.

          The AMG businesses were organized into two operating segments: businesses that provided content management and delivery services, which we refer to as Content Services, and businesses that provided creative services, which we refer to as Creative Services. The Content Services segment was in turn divided into three business units: (i) the content distribution business unit, which we refer to as Content Distribution, (ii) the media management services business unit, which we refer to as Media Services and (iii) the systems integration business unit, which we refer to as Systems Integration or SI.

Recent Developments — The Creative/Media transaction

          In furtherance of our corporate strategy, on November 24, 2010, we entered into a definitive agreement (the Deluxe Purchase Agreement) with Deluxe Entertainment Services Group Inc. (Deluxe US) and its direct, wholly-owned subsidiary, Deluxe UK Holdings Limited (Deluxe UK and, together with Deluxe US, Deluxe), pursuant to which we agreed to sell to Deluxe the Creative Services and Media Services business units of AMG. We refer to this transaction as the Creative/Media transaction. In connection with the Creative/Media transaction, we effected an internal reorganization, so that prior to the closing of that transaction: (i) AMG owned the assets and operations of Creative Services and Media Services in the United States, (ii) Ascent Media Group Limited, a company organized under the laws of England (AMGL) owned the assets and operations of Creative Services and Media Services in the United Kingdom, and (iii) AMG and AMGL did not hold any assets or operations other than those included in Creative Services and Media Services. We refer to AMG and AMGL after such internal reorganization as the Creative/Media Group Entities. On December 31, 2010, we consummated the Creative/Media transaction, and the Creative/Media Group Entities became wholly-owned subsidiaries of Deluxe, and our company received approximately $67.3 million in cash, after giving effect to a working capital adjustment of approximately $1.0 million, and Deluxe assumed certain net indebtedness of approximately $1.8 million. As a result of the internal reorganization described above, the Content Distribution and Systems Integration units previously held by AMG and its subsidiaries are currently held by us through subsidiaries other than AMG.

          The Creative/Media transaction did not require stockholder approval and will not be voted on at the special meeting. The Creative/Media transaction and the Content Distribution transaction are separate and independent transactions, and neither is conditioned on the other. The net proceeds from the Creative/Media transaction will be used to support our acquisition strategy of identifying and acquiring one or more operating businesses that we believe offer the opportunity for attractive returns on equity, and for other general corporate purposes. We have no current intention to distribute any proceeds of the transaction as a dividend or other distribution on our capital stock.

          A summary of the Creative/Media transaction is provided in this proxy statement. Please see “The Creative/Media Transaction” below.

Content Distribution

          Content Distribution provides the services to prepare client-provided media assets for global distribution via satellite, fiber and the Internet, as well as the technical infrastructure and operating staff necessary to assemble programming content for cable and broadcast networks and to distribute media signals via satellite and terrestrial networks. Content Distribution operates from facilities located in California, Connecticut, Minnesota, New York, New Jersey, the United Kingdom and Singapore.

          Key services provided by Content Distribution include the following:

	•		Network origination, playout and master control. Content Distribution provides outsourced network origination services to cable, satellite and pay-per-view programming networks. This suite of services involves the digitization and management of client-provided media assets (programs, advertisements, promotions and secondary events) and their aggregation into a continuous linear playout stream in accordance with the programming schedule. Currently, more than one hundred programming feeds — running 24 hours a day, seven days a week — are supported by Content Distribution facilities in the United States, United Kingdom and Singapore. Network origination services are provided from large-scale technical platforms with integrated asset management, hierarchical storage management (a data storage technique which automatically moves data between high-cost and low-cost storage media), and broadcast automation capabilities. Associated services include cut-to-clock and compliance editing, tape library management, ingest & quality control, format conversion, and tape duplication. For multi-language television services, Content Distribution facilitates the collection, aggregation, and playout of language-specific materials, including subtitles and foreign language dubs. On-air graphics and other secondary events are also integrated with the content. In conjunction with network origination services, Content Distribution operates television production studios and provides complete post-production services for on-air promotions for some clients.
	•		Transport and connectivity. Content Distribution operates satellite earth station facilities in Singapore, California, New York, New Jersey, Minnesota and Connecticut. Content Distribution facilities are

staffed 24 hours a day and are used for uplink, downlink and turnaround services. Content Distribution’s facilities access various distribution points, including basic and premium cable, broadcast syndication, direct-to-home and DBS markets and resell transponder capacity for both occasional and full-time use. Content Distribution’s “teleports” are high-bandwidth communications gateways with video switches and facilities for satellite, optical fiber and microwave transmission. Content Distribution’s facilities offer satellite antennae capable of transmitting and receiving feeds in both C-Band and Ku-Band frequencies. Content Distribution operates a global fiber network to carry real-time video and data services between various locations in the United States, United Kingdom, and Singapore. This network is used to provide full-time program feeds and ad hoc services to clients and to transport files and real-time signals between locations. Content Distribution also provides industry standard encryption and compression services as needed for customer satellite transmission. Content Distribution’s transport and connectivity services may be directly associated with network origination services or may be provided on a stand-alone basis.

          Content Distribution has entered into long-term contracts for network origination and transport services with many of its largest customers.

          Content Distribution is to be sold to Encompass as part of the Content Distribution transaction. See “The Transaction Proposal” below.

Media Services

          Media Services provided the services to archive, optimize, transform, and repurpose completed media assets for studios and other owners and distributors of media content.

          Key services provided by Media Services included the following:

	•		Digital media management services that enable content owners to digitize content once, then store, manage, re-purpose and distribute such content globally in multiple formats and languages to numerous providers;
	•		Assembly, formatting and master creation and duplication;
	•		Transferring film to video or digital media masters;
	•		Professional duplication and standards conversion;
	•		Advertising distribution;
	•		Syndicated television distribution;
	•		Restoration, preservation and asset protection of existing and damaged content;
	•		DVD compression and authoring and menu design; and
	•		Storage of elements and working masters in physical archives with a highly controlled environment protected from temperature and humidity variation, seismic disturbance, fire, theft and other external events.

          As used in the media services industry, the term “element” refers to a unit of created content of any length, such as a feature film, television episode, commercial spot, movie trailer, promotional clip or other unique product, such as a foreign language version or alternate format of any of the foregoing.

          Media Services was sold to Deluxe as part of the Creative/Media transaction. See “The Creative/Media Transaction” below.

Creative Services

          AMG’s Creative Services group provided various technical and creative services necessary to complete principal photography into final products, such as television commercials, internet and new media advertising,

feature films, movie trailers, documentaries, independent films, scripted and reality television, TV movies and mini-series, music videos, interactive games and new digital media, promotional and identity campaigns and corporate communications. We refer to this business collectively as Creative Services.

          These services are referred to generally in the entertainment industry as “postproduction” services. AMG marketed its creative services under various brand names that are generally well known in the entertainment and advertising industries, including Beast, Company 3, Encore Hollywood, Level 3 Post, Method, RIOT Atlanta and Rushes. The Creative Services client base was comprised of advertising agencies, creative editorial companies, commercial production companies, major motion picture studios and their international divisions, independent television production companies, broadcast networks, cable programming networks, corporate media producers, independent owners of television and film libraries and emerging new media distribution channels. The principal facilities of the Creative Services businesses were in Los Angeles, the New York metropolitan area and London, with additional facilities in Atlanta, Austin, Chicago, Detroit and San Francisco.

          Key services provided by Creative Services included the following:

	•		Creative editorial services, tools and talent required through all stages of the “finishing” process necessary for creation and distribution of completed advertising content;
	•		Color correction for the development of a creative look and feel for media content utilizing creative colorizing techniques, equipment and processes;
	•		Digital intermediate services to convert film to a high resolution digital master file for color correction, creative editorial and electronic assembly of masters in other formats;
	•		Visual effects to create images that cannot be created physically through a more cost-effective means; and
	•		The services necessary for clients to view principal photography on a daily basis (known as “dailies” in the United States and “rushes” in Europe).

          Creative Services was sold to Deluxe as part of the Creative/Media transaction. See “The Creative/Media Transaction” below.

Systems Integration

          The Systems Integration or SI business designs, builds, installs and services advanced technical systems for production, management and delivery of rich media content to the worldwide broadcast, cable television, broadband, government and telecommunications industries. The SI business operates out of facilities in New Jersey, California and Virginia, and services global clients including major broadcasters, cable and satellite networks, telecommunications providers, and corporate television networks, as well as numerous production and post-production facilities. Services offered include program management, engineering design, equipment procurement, software integration, construction, installation, service and support. The SI business is not being sold as part of the Content Distribution transaction or the Creative/Services transaction.

Effect of the Content Distribution transaction and Creative/Media transaction on our Businesses

          The Content Distribution transaction provides for the sale of 100% of our Content Distribution business unit to Encompass. The Creative/Media transaction provided for the sale of 100% of our Creative Services and Media Services business units to Deluxe. Following consummation of the Content Distribution transaction and the Creative/Media transaction, our principal assets will consist of our wholly owned subsidiary Monitronics and cash and cash equivalents. We will also own the Systems Integration business unit, certain commercial real estate holdings previously associated with the operating businesses of AMG, and assets used in the operation of our corporate and support functions The Company considers its real estate holdings and the Systems Integration business unit to be non-core assets and will continue to explore opportunities to sell or monetize those assets. The Company currently intends to use its cash and marketable securities (including the net proceeds from the Content Distribution transaction and the Creative/Media transaction) for general corporate purposes, which may include potential acquisitions. The Company does not currently intend to pay a cash dividend or distribution to the holders of our capital stock.

THE TRANSACTION PROPOSAL

          The following is a description of the material aspects of the Content Distribution transaction, including the purpose of the transaction, background information on the transaction, the analysis undertaken by our board and its financial advisor, and the material terms of the Purchase Agreement and certain related agreements entered into between the Company and Encompass. While we believe the following description covers the material terms of the Content Distribution transaction, the description may not contain all of the information that is important to you. In particular, the following summary of the Purchase Agreement is not complete and is qualified in its entirety by reference to the copy of the Purchase Agreement attached to this proxy statement as Annex B and incorporated herein by reference. You should carefully read this proxy statement and the other documents to which we refer, including the Purchase Agreement, for a complete understanding of the terms of the Content Distribution transaction.

Reasons for the Content Distribution transaction

          The purpose of the Content Distribution transaction is to realize greater value from our Content Distribution business, in the immediate time frame, by selling that business for cash. Our board of directors believes that the value of our Content Distribution business has not been fully reflected in the market price of the Company’s Series A common stock. In reaching its decision to approve and recommend the Content Distribution transaction, the board considered various factors, including, but not limited to:

	•		the trading history of the Company’s Series A common stock on The NASDAQ Global Select Market;
	•		the high degree of competition faced by the Content Distribution business, and the likely need to increase the scale of the Content Distribution business to meet such competition successfully;
	•		the substantial ongoing capital commitments that would be required to maintain and grow the operations of the Content Distribution business;
	•		the dependence of the Content Distribution business on the media, entertainment and advertising industries, and the relative volatility of such industries;
	•		the board’s assessment that the consideration to be received by the Company in the Content Distribution transaction was a fair price for the Content Distribution business, under the present circumstances;
	•		the receipt of the opinion of Moelis & Company LLC described below, under the heading “Opinion of our Financial Advisor”;
	•		the board’s determination that the process undertaken by the Company to identify potential opportunities or strategies for maximizing the value of the AMG operating businesses, for the benefit of the Company’s stockholders, as described below under the heading “—Background of the Content Distribution Transaction”, was sufficient to identify the Content Distribution transaction as the most attractive opportunity or strategy available at this time for the Content Distribution business; and
	•		the fact that the terms of the Content Distribution transaction were negotiated by the Company and Encompass at arms’-length, over a period of several months.

          In light of such factors and other factors considered by the board, the board believes that the Content Distribution transaction is more favorable to our stockholders than an alternative strategy of continuing to hold the Content Distribution business.

          The board intends to use the net proceeds of the Content Distribution transaction, together with the net proceeds of the Creative/Media transaction and the Company’s existing cash and marketable securities, for general corporate purposes, which may include potential acquisitions. The board believes that acquisition candidates are available that provide an opportunity for better returns on invested capital than would be obtained by continuing to hold and operate the Content Distribution business. The Company has no current intention to distribute any proceeds of the transaction as a dividend or other distribution on our capital stock.

          For these reasons, and the other factors discussed below under the headings “—Background of the Content Distribution transaction” and “—Opinion of Our Financial Advisor”, our board of directors has determined that it is advisable, fair to, and in the best interests of the Company and its stockholders to sell the Content Distribution business unit on the terms and subject to the conditions set forth in the Purchase Agreement.

Background of the Content Distribution transaction

          The Company regularly reviews and evaluates its business strategy and strategic alternatives with the goal of enhancing stockholder value. To this end, William R. Fitzgerald, the chairman of the board of directors and chief executive officer of the Company, initiated a discussion among the directors at the Company’s regular board meeting on December 17, 2009. Mr. Fitzgerald noted that the Company’s Series A common stock had been trading in a relatively narrow band on The NASDAQ Global Select Market, with share prices closing predominantly in the $23 to $27 per share range since the Company’s spin-off, indicating a total market capitalization for the Company in the range of approximately $322,000,000 to $378,000,000. Subtracting the Company’s $335,000,000 of cash and marketable securities on a consolidated basis, this capitalization indicated that the public market was ascribing relatively minimal value to AMG’s operating businesses.

          Mr. Fitzgerald proposed that the board consider whether opportunities or strategies were available to the Company to improve the valuation of AMG implied by the public markets. After discussion, the directors recommended that the Company undertake a process to identify potential opportunities or strategies for maximizing the value of the AMG operating businesses, for the benefit of the Company’s stockholders. The board recommended that the Company engage an independent financial advisor to assist in such process, but determined that it was premature to address whether such potential opportunities or strategies might include a sale or other transaction involving the AMG operating businesses.

          Following that meeting, Mr. Fitzgerald and other representatives of the Company interviewed representatives from a number of financial advisory firms and, after reviewing the qualifications of four candidates, selected Moelis & Company LLC (Moelis) to represent the Company in connection with its strategic evaluation process with respect to the AMG operating businesses.

          On January 28, 2010, Emily Keeton, Senior Vice President, Corporate Development, of AMG presented a report to the board of directors of the Company in which a number of potential strategies were discussed for enhancing the value of AMG, including internal growth, consolidation, partial divestiture, or a sale of AMG in its entirety. The board discussed the advantages and disadvantages of each approach, and identified areas in which they desired additional information. The board endorsed the retention of Moelis and authorized management to continue exploring strategic strategies for AMG’s businesses, including a possible sale or other transaction involving AMG or any of its business units.

          The Company engaged Moelis as financial advisor on February 16, 2010, and the Company and Moelis began work on the preparation of a confidential information memorandum (CIM) describing the businesses of AMG, including Creative Services, Content Distribution, Media Services, and SI. On March 11, 2010, following a briefing from Ms. Keeton, the board directed management to complete the CIM and authorized the distribution of the CIM on behalf of the Company to a group of potential strategic and financial investors to be identified by Moelis, in order to assess the potential level of interest in a sale or other transaction involving AMG or any of its business units.

          During March and April 2010, with assistance from Moelis, AMG management completed the CIM. In April 2010, Moelis distributed the CIM to a variety of industry participants and financial sponsors. Potentially interested parties received a process letter from Moelis indicating that the Company was open to inquiries regarding a potential acquisition of AMG as a whole, a potential acquisition of one or more business units of AMG, or a joint venture or other alternative transaction regarding AMG or one or more of its business units. A total of 29 potential bidders received copies of the CIM, including 19 financial sponsors and 10 potential strategic investors. Ten parties submitted initial indications of interest to Moelis in response to the CIM, including three relating to a potential acquisition of AMG as a whole, six relating to a potential acquisition of the Content Distribution business unit (either alone or in combination with another business unit of AMG), and one relating to a potential partial acquisition that would not include Content Distribution.

          At a board meeting on May 4, 2010, Ms. Keeton provided the board with an update on the strategic evaluation process, and the board discussed the range of potentially interested parties involved.

          In June and July 2010, nine potential bidders were invited to attend management presentations near the Company’s offices in Santa Monica, California, and to conduct initial due diligence regarding AMG’s businesses with information posted to an electronic data room. Afterwards, eight bidders submitted non-binding indications of interest with respect to a potential transaction, including four financial sponsors and four potential strategic investors.

          Due diligence continued in August 2010, including site visits and meetings with the divisional managers of each of AMG’s business units, for selected potential bidders.

          The board of directors of the Company discussed the strategic alternatives process again at its board meeting on August 10, 2010, including a review of the process being conducted by Moelis, the terms of the second round indications of interest, and other considerations, including AMG’s operating results for the first half of calendar year 2010, the state of the credit markets and overall financial markets, and the potential impact of the strategic alternatives process on AMG’s customers and employees. The board also considered the potential value of the Company’s real estate portfolio and any other assets or operations that might remain with the Company, after any potential sale of AMG or one or more of its business units. On the basis of their deliberations, the board determined to continue with the strategic evaluation process.

          On August 11, 2010, bidders were requested to submit final binding offers to the Company by August 25, 2010, detailing the terms of the transaction proposed, including the business units involved, the form and amount of consideration to be received by the Company, and any financing contingency. The proposal letter for this round of bidding solicited only offers relating to acquisition proposals with respect to AMG or one or more of its business units, and potential bidders were provided a form of acquisition agreement, which they were requested to revise to the extent the bidder deemed necessary and return with their bid. Three strategic bidders submitted offers in this round, each relating to one or more business units of AMG. Two of the bidders included mark-ups of the draft purchase agreement provided by the Company, and the other provided a memorandum with detailed comments to the draft.

          On August 25, 2010, Encompass submitted a written offer to acquire the Content Distribution business unit for a purchase price representing a total enterprise value for the Content Distribution business unit of $106 million. The Company and Encompass negotiated the terms of Encompass’s offer from August 25, 2010, through September 10, 2010, when Encompass submitted a revised offer based on a total enterprise value of approximately $120 million, including cash and the assumption of certain liabilities and obligations of the Company and its subsidiaries. Based on the terms of such revised offer, including price and the absence of a financing condition, the Company determined that the Encompass offer was superior to available alternatives for the Content Distribution business, and the Company agreed to negotiate exclusively with Encompass regarding AMG’s Content Distribution business unit through October 11, 2010. The exclusivity period was subsequently extended by mutual agreement through October 22, 2010. During this period, the Company also negotiated exclusively with Deluxe (another bidder in the process described above) regarding AMG’s Creative Services and Media Services business units.

          From mid-September through early December, 2010, the Company and Encompass, directly and through their respective counsel and financial advisors, negotiated the terms and conditions of a purchase and sale agreement and other related documentation, and Encompass completed its confirmatory due diligence. In that connection, the chief executive officer of Encompass, Simon Bax, met with Mr. Fitzgerald and other representatives of the Company on October 21, 2010, including Ms. Keeton and William Niles, the Executive Vice President and General Counsel of the Company and AMG, at the Company’s offices in Santa Monica, California, to resolve a number of key business and legal issues regarding the terms and conditions of the draft purchase and sale agreement. Ms. Keeton and Mr. Niles met again with Mr. Bax at Encompass’s Los Angeles offices on October 29, 2010 to resolve a number of key issues relating to the transaction.

          At the Company’s board meeting on October 12, 2010, Mr. Fitzgerald briefed the board of directors regarding the on-going negotiations with Encompass regarding the sale of the Content Distribution business unit, as well as the concurrent negotiations with Deluxe regarding the sale of the Creative Services and Media Services business units, describing the principal financial and business terms of each proposed transaction, the financing requirements of each bidder, and the regulatory approvals, if any, to which each proposed transaction would be

subject. Mr. Fitzgerald noted that as currently contemplated, the Company had been advised by outside counsel that the Content Distribution transaction would be subject to stockholder approval, but the Creative/Media transaction would not require stockholder approval.

          At a meeting of the board of directors on November 5, 2010, Ms. Keeton and Mr. Niles presented the principal terms and conditions of each of the Content Distribution transaction and the Creative/Media transaction. The board carefully reviewed the financial terms, closing conditions, potential indemnification obligations, execution risk and other key terms and conditions of each of the transactions, and discussed the potential benefits and potential disadvantages of the transactions to the Company and its stockholders. The board also discussed the businesses and assets that the Company would continue to own following consummation of the two transactions, and the strategic profile and potential value of such business and assets. Following its deliberations, the board authorized management to complete the definitive documentation for both transactions.

          On November 19, 2010, the board of directors of the Company convened a special telephonic meeting to consider the proposed Content Distribution transaction, as well as the proposed Creative/Media transaction. Each of the directors was present at this meeting, as well as Mr. Niles, Ms. Keeton, Marc Leaf, a partner of Baker Botts L.L.P., special counsel to our company for each of the Content Distribution transaction and the Creative/Media transaction, and Navid Mahmoodzadegan and Anthony Guagliano, each a managing director of Moelis.

          At the meeting, Mr. Mahmoodzadegan and Mr. Guagliano made a presentation to the board of directors regarding the Content Distribution transaction, and Mr. Mahmoodzadegan delivered the oral opinion of Moelis, which was later confirmed in writing, that the consideration to be received by the Company in such transaction in exchange for the Content Distribution business was fair to the Company from a financial point of view, as of the date of the meeting. The directors questioned Mr. Mahmoodzadegan and Mr. Guagliano regarding the bases of their opinion and discussed the consideration to be received by the Company if the transaction were consummated. In response to questions from the board, Mr. Niles and Mr. Leaf discussed the terms of the transaction and the process involved in completing the transaction, including the requirement for shareholder approval and the likely timetable for obtaining regulatory consents and otherwise satisfying closing conditions. Following such discussion, the board unanimously approved the Content Distribution transaction and unanimously adopted a resolution finding the Content Distribution transaction to be advisable, fair to, and in the best interests of the Company and its stockholders and recommending that the stockholders of the Company approve the Content Distribution transaction. In addition, the board authorized the management of the Company to finalize and enter into the purchase agreement for the Content Distribution transaction, consistent with the terms and conditions approved by the board.

          At the November 19, 2010, meeting, Mr. Mahmoodzadegan and Mr. Guagliano also made a presentation to the board of directors regarding the Creative/Media transaction, and the board reviewed and unanimously approved the terms and conditions of the Creative/Media transaction.

          From November 19, 2010 through November 24, 2010, representatives of the Company and Deluxe finalized the terms of the purchase agreement for the Creative/Media transaction and certain related ancillary documents, and on November 24, 2010, the Company and Deluxe executed and delivered a purchase and sale agreement with respect to the Creative/Media transaction.

          From November 24, 2010 through December 2, 2010, representatives of the Company and Encompass finalized the terms of the purchase agreement for the Content Distribution transaction and certain related real property leases and services agreements, and on December 2, 2010, the Company and Encompass executed and delivered the Purchase Agreement with respect to the Content Distribution transaction.

          On December 17, 2010, the Company signed and closed the Monitronics transaction. See “Acquisition of Monitronics” below. On December 31, 2010, the Company and Deluxe consummated the Creative/Media transaction. See “The Creative/Media Transaction” below.

          The Content Distribution transaction, the Creative/Media transaction and the Monitronics transaction are separate transactions, independently approved by our board of directors, and none of the transactions is conditioned upon any of the others.

Recommendation of Our Board of Directors

          After careful consideration, our board of directors has unanimously approved the Purchase Agreement and determined that the Purchase Agreement and the Content Distribution transaction are advisable, fair to, and in the best interests of the Company and its stockholders. ACCORDINGLY, YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE TRANSACTION PROPOSAL.

Opinion of Our Financial Advisor

Opinion

          On February 16, 2010, in connection with its ongoing evaluation of strategic alternatives to enhance the value of AMG recognized by the Company’s stockholders, the Company engaged Moelis to act as the Company’s exclusive financial advisor and capital markets advisor in connection with certain potential transactions involving AMG, including a potential sale of equity securities of AMG, a potential sale of one or more business units of AMG, or a potential joint venture, business combination or other alternative transaction involving AMG or any of its business units.

          Pursuant to the engagement letter between the Company and Moelis, Moelis agreed to undertake the following activities, as appropriate and if requested by the Company:

	(a)		customary business and financial analysis of AMG, including, upon further request, an analysis of the feasibility and pricing of a potential strategic transaction involving AMG;
	(b)		identifying and evaluating transaction candidates for a potential strategic transaction involving AMG;
	(c)		contacting appropriate transaction candidates that AMG and Moelis agreed may be appropriate for a transaction, meeting with them, and providing them information regarding AMG as may be appropriate and acceptable to the Company, subject to customary business confidentiality;
	(d)		assisting the Company’s preparation of a marketing plan and a confidential information memorandum, or CIM, to be distributed to potential acquirors;
	(e)		assisting the Company in developing a strategy to effect potential transactions;
	(f)		assisting the Company, upon further request, in structuring, evaluating a potential acquiror’s financing for, and negotiating potential transactions and participating in such negotiations as requested; and
	(g)		at the Company’s request, meeting with the Company’s board of directors to discuss potential transactions, including financial implications.

          Pursuant to the engagement letter, Moelis also agreed, upon the Company’s request, to undertake an investigation and analysis to enable Moelis to render an opinion to the board of directors of the Company addressing the fairness to the Company, from a financial point of view, of the consideration the Company would receive in a potential transaction involving AMG or one or more of its business units.

          On November 19, 2010, at a meeting of the board of directors of the Company held to evaluate the Content Distribution transaction, Moelis delivered to the board its oral opinion, which it subsequently confirmed in writing, to the effect that, as of such date and based upon and subject to the limitations, qualifications, factors and assumptions set forth in its opinion, the consideration to be received by the Company in the Content Distribution transaction was fair, from a financial point of view, to the Company.

          The full text of Moelis’s opinion dated November 19, 2010, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Moelis, is attached as Annex C to this proxy statement and is incorporated herein by reference. The Company’s stockholders are urged to read the opinion carefully in its entirety. The summary of the opinion of Moelis set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion. No limitations were imposed by the board of directors of the Company upon Moelis with respect to the investigations made or procedures followed by it in rendering its opinion.

          Moelis’s opinion is addressed to the board of directors of the Company, is directed only to the consideration to be received by the Company in exchange for the Content Distribution business unit in the Content

Distribution transaction and does not constitute a recommendation to any holder of the Company’s Series A common stock as to how such holder should vote with respect to the Content Distribution transaction. Moelis’s opinion does not address the Company’s underlying business decision to effect the Content Distribution transaction or the relative merits of the Content Distribution transaction as compared to any alternative business strategies or transactions that might be available to the Company. At the direction of the board of directors of the Company, Moelis was not asked to, nor did it, offer any opinion as to the material terms of the Purchase Agreement or the form of the Content Distribution transaction.

          In rendering this opinion, Moelis assumed, with the consent of the Company’s board of directors, that the final executed form of the Purchase Agreement does not differ in any material respect from the draft that it examined for purposes of rendering its opinion. Moelis also assumed:

	•		the accuracy of the representations and warranties of all parties to the Purchase Agreement;
	•		that each party to the Purchase Agreement will perform all of the covenants and agreements required to be performed by such party;
	•		that the parties will comply with all of the material terms of the Purchase Agreement;
	•		that all conditions to the consummation of the Content Distribution transaction will be satisfied without waiver thereof; and
	•		that the Content Distribution transaction will be consummated in a timely manner in accordance with the terms described in the Purchase Agreement, without any modifications or amendments thereto or any adjustment to the consideration (through indemnification claims, offset, purchase price adjustments or otherwise).

          Moelis has also assumed, upon the advice of the Company and with the consent of the board of directors, that all governmental, regulatory and third party approvals and consents necessary for the consummation of the Content Distribution transaction will be obtained without the imposition of any delay, limitation, restriction, divestiture or condition that would have an adverse effect on the Content Distribution business unit or Encompass or on the expected benefits of the Content Distribution transaction.

          In arriving at its opinion, Moelis, among other things:

	•		reviewed certain publicly available business and financial information relating to the Company that it deemed relevant;
	•		reviewed certain internal information relating to the Content Distribution business unit, including financial forecasts, earnings, cash flow, assets, liabilities and prospects of the Content Distribution business unit furnished to it by the Company;
	•		conducted discussions with members of senior management and representatives of the Company concerning the matters described above;
	•		reviewed publicly available financial and stock market data, including valuation multiples, for certain other companies in lines of business that it deemed relevant and compared them with the Content Distribution business unit;
	•		reviewed a draft of the purchase and sale agreement, dated November 17, 2010;
	•		participated in certain discussions and negotiations among representatives of the Company and Encompass and their financial and legal advisors; and

•

conducted such other financial studies and analyses and took into account such other information as Moelis deemed appropriate.

          In connection with its review, Moelis did not assume any responsibility for independent verification of any of the information supplied to, discussed with, or reviewed by it for the purpose of its opinion and, with the consent of the Company’s board of directors, relied on such information being complete and accurate in all material respects. In addition, at the board of directors’ direction, Moelis has not made any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet, or otherwise) of the Company, nor has Moelis been furnished with any such evaluation or appraisal. With respect to the forecasted financial information referred to above, Moelis has assumed, with the board of directors’ consent, that they have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company as to the future performance of the Content Distribution business unit and that such future financial results will be achieved at the times and in the amounts projected by management. Moelis does not assume any responsibility for and does not express any view as to such forecasted financial information or any estimate, judgment or assumptions on which they were based, and Moelis has relied upon the assurances of the management of the Company that they are unaware of any facts that that would make the information provided to or reviewed by us incomplete or misleading.

          In connection with its review, Moelis did not undertake any independent analysis or investigation of any pending or threatened litigation, possible unasserted claims or other contingent liabilities (whether or not reserved) to which the Company or any of its affiliates are a party or may be subject. Moelis’s opinion makes no assumption concerning, and, therefore, does not consider, the possible assertion of claims, outcomes or damages arising out of or in connection with any such matters. In addition, Moelis has not evaluated the solvency of any party to the Purchase Agreement under any state or federal laws or rules, regulations, guidelines or principles relating to bankruptcy, insolvency or similar matters.

          Moelis’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Moelis as of, the date of its opinion. Subsequent developments may affect the opinion and Moelis does not have any obligation to update, revise, or reaffirm the opinion. Moelis does reserve the right to modify its opinion based upon additional information which may become publicly available, or which may be provided to or obtained by it, which suggests in its judgment a material change in the assumptions upon which the opinion is based, or which otherwise could affect the conclusions expressed in the opinion. Moelis’s opinion is for the use and benefit of the board of directors of the Company in its evaluation of the Content Distribution transaction and relates solely to the fairness, from a financial point of view, as of the date of its opinion, of the consideration to be received by the Company for the Content Distribution business unit in the Content Distribution transaction, and Moelis has expressed no opinion as to the fairness of the Content Distribution transaction to the holders of any class of securities, creditors or other constituencies of the Company or the application by the Company of the consideration, including any intended use of such consideration by the Company or any intended distribution of such consideration in whole or in part by the Company to the Company’s stockholders, creditors, management, affiliates, employees, agents, representatives, advisors or any other constituency of the Company.

          Furthermore, Moelis’s opinion does not in any manner address the allocation of the consideration among the Company’s affiliates or subsidiaries for U.S. federal, state or local, or foreign, tax purposes. In addition, Moelis has not expressed any opinion as to the fairness of the amount or nature of any compensation to be received by any of the Company’s officers, directors or employees, or any class of such persons, relative to the consideration. Moelis is also not expressing any view or opinion with respect to, and has relied, with the consent of the board of directors of the Company, upon the assessments of the Company’s management regarding legal, regulatory, accounting, tax or similar matters relating to the Company or the Content Distribution transaction, as to which Moelis understands the Company obtained such advice as the Company deemed necessary from qualified professionals. This opinion was approved by a Moelis & Company LLC fairness opinion committee.

Financial Analyses

          In accordance with customary investment banking practice, Moelis considered generally accepted valuation methods in reaching its opinion. The following is a summary of the material financial analyses presented to the

Company’s board of directors at its meeting held on November 19, 2010, in connection with the delivery of its oral opinion at that meeting and its subsequent written opinion.

          In its evaluation of the proposed Content Distribution transaction, Moelis analyzed the historical and projected financial performance of the Content Distribution business unit and considered several valuation methodologies, including a discounted cash flow analysis, a comparable public trading multiple analysis and a precedent transaction analysis, among others.

          In performing its financial analyses, Moelis noted the following:

	•		over the past six month period the Company traded at a market value that implied a total enterprise value for the Content Distribution business unit of close to zero;
	•		the financial projections for the Content Distribution business unit provided by the Company did not include overhead to operate the Content Distribution business unit on a standalone basis; accordingly, using a revenue-based pro rata share of the Company’s total corporate overhead, the Company estimated annual corporate overhead costs of $9.4 million to be allocated to the Content Distribution business unit in order to support standalone operations;
	•		transactions with publicly disclosed valuation multiples were completed during a more robust M&A environment; accordingly, analyses based on precedent transactions were not meaningful for the Content Distribution business unit; and
	•		the Systems Integration business was not included in the financial analyses because it was not part of the Content Distribution transaction.

          The summary of certain material financial analyses set forth below does not purport to be a complete description of the analyses performed by Moelis in arriving at its opinion. The fact that any specific analysis has been referred to in the summary below or in this proxy statement is not meant to indicate that such analysis was given more weight than any other analysis. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances; therefore, such an opinion is not readily susceptible to partial analysis or summary description. No company, business or transaction used in such analyses as a comparison is identical to the Company or the Content Distribution business unit or the proposed Content Distribution transaction, nor is an evaluation of such analyses entirely mathematical. In arriving at its opinion, Moelis did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Moelis believes that its analyses must be considered as a whole and that selecting portions of its analyses and of the factors considered by it, without considering all factors and analyses, would, in the view of Moelis, create an incomplete and misleading view of the analyses underlying Moelis’s opinion.

          Some of the summaries of financial analyses below include information presented in tabular format. In order to fully understand Moelis’s analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analyses. Considering the data described below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Moelis’s analyses.

          The analyses performed by Moelis include analyses based upon forecasts of future results, which results might be significantly more or less favorable than those upon which Moelis’s analyses were based. The analyses do not purport to be appraisals or to reflect the prices at which the Company’s Series A common stock or Series B common stock would trade at any future time, whether before or after the closing of the Content Distribution transaction. Because the analyses are inherently subject to uncertainty, being based upon numerous factors and events, including, without limitation, factors relating to general economic and competitive conditions beyond the control of the parties or their respective advisors, neither Moelis nor any other person assumes responsibility if future results or actual values are materially different from those contemplated above.

Discounted Cash Flow Analysis

          Moelis conducted a discounted cash flow, or DCF, analysis of the Content Distribution business unit to calculate a range of implied equity values for the Content Distribution business unit. A DCF analysis is a method of evaluating an asset using estimates of the future unlevered free cash flows generated by assets and taking into consideration the time value of money with respect to those future free cash flows by calculating their “present value.” “Present value” refers to the current value of one or more future cash payments from the asset, which Moelis refers to as that asset’s free cash flows, and is obtained by discounting those free cash flows back to the present using a discount rate that takes into account macro-economic assumptions and estimates of risk, the opportunity cost of capital, capitalized returns and other appropriate factors. “Terminal value” refers to the capitalized value of all free cash flows from an asset for periods beyond the final forecast period.

          Moelis analyzed the four-year projections provided by the Company’s management with respect to future unlevered free cash flows of the Content Distribution business unit. The future unlevered free cash flows for such four-year period were discounted back to present value as of December 31, 2010 using discount rates ranging from 14.0% to 16.0%, which discount ranges were based upon the Content Distribution business unit’s weighted average cost of capital. The terminal value of the Content Distribution business unit was then calculated using perpetuity growth rates ranging from 2.0% to 3.0% in each case, based upon guidance provided by the Company’s management.

          The foregoing analysis implied a valuation range of $113 million to $138 million assuming $9.4 million of corporate overhead and no additional cost synergies. Moelis noted that the consideration for the Content Distribution transaction of approximately $120 million (comprising cash consideration of $113.25 million and the assumption of approximately $6.75 million in existing Company liabilities and obligations) fell within such range.

Comparable Public Trading Multiples Analysis

          Moelis compared selected financial and transaction value metrics of the Content Distribution business unit with similar data for three publicly traded companies. Moelis selected the companies based on a number of criteria, including the nature of the companies’ operations, size and target markets. Moelis focused on companies providing content distribution services and placed an emphasis on companies with an express focus on network origination, playout and master control services and transport and connectivity services.

          Although none of the selected companies are directly comparable to the Content Distribution business unit, the companies selected include:

	•		Loral Space and Communications, Inc.;
	•		Hughes Communications, Inc.; and
	•		RRS at Global Communications Network Ltd.
			For each of the companies identified above, Moelis calculated various valuation multiples, including:
	•		the ratio of enterprise value to projected revenue for calendar year 2010;
	•		the ratio of enterprise value to projected revenue for calendar year 2011;
	•		the ratio of enterprise value to projected EBITDA for calendar year 2010; and
	•		the ratio of enterprise value to projected EBITDA for calendar year 2011.

          Moelis calculated the range of trading multiples for all companies, as well as just for RRS at Global Communications Network Ltd., which it considered to be the most directly comparable company to the Content

Distribution business unit relative to the other companies selected for the analysis. The following table summarizes the range of trading multiples for all companies, the mean and median multiples for all companies, the multiples for the selected company, and the implied multiples for the Content Distribution business unit in the Content Distribution transaction:

Content

Range of All

Mean of All

Median of All

Selected

Distribution

Companies

Companies

Companies

Company

business unit

Enterprise Value/CY10E Revenue

0.9x — 2.6x

1.6x

1.4x

0.9x

1.1x

Enterprise Value/CY10E Revenue

0.8x — 2.5x

1.5x

1.3x

0.8x

1.1x

Enterprise Value/CY10E EBITDA

4.1x — 7.4x

5.9x

6.2x

4.1x

6.2x

Enterprise Value/CY10 EBITDA

3.6x — 7.0x

5.2x

5.1x

3.6x

5.0x

          For purposes of its analysis, Moelis calculated the enterprise value as the market capitalization plus total debt, minority interests and preferred stock, less cash and cash equivalents, and used revenue based on projections reported by independent research analyst reports and Reuters consensus estimates. To calculate these trading multiples, Moelis used closing trading prices of equity securities of each identified company on November 18, 2010. For the Content Distribution business unit, Moelis used revenue and EBITDA based on estimates and projections prepared by the Company’s management.

          It should be noted that no company used in the above analysis is identical to the Content Distribution business unit. In evaluating companies identified by Moelis as comparable to the Content Distribution business unit, Moelis made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Content Distribution business unit.

Precedent Transaction Analysis

          Transactions with publicly disclosed valuation multiples were completed during a more robust M&A environment and, as a result, analyses based on precedent transactions were not meaningful for the Content Distribution business unit.

Other Information

          The total value of the Content Distribution transaction was determined through negotiation between the Company and Encompass, and the decision by the Company’s board of directors to enter into the Purchase Agreement was solely that of the Company’s board of directors. The Moelis opinion and financial analyses were only one of many factors considered by the Company’s board of directors in its evaluation of the Content Distribution transaction and should not be determinative of the views of the Company’s board of directors or management with respect to the Content Distribution transaction or the consideration received by the Company in the Content Distribution transaction.

          Moelis, as part of its investment banking business, is continually engaged in the valuation of businesses and securities in connection with business combinations and acquisitions and for other purposes. The Company retained Moelis to advise the Company and to deliver an opinion to the board of directors of the Company with respect to the Content Distribution transaction on the basis of such experience and its familiarity with the industry in which the Company operates and experience in transactions similar to the proposed Content Distribution transaction, as well as other factors that the board of directors of the Company considered relevant. Moelis has consented to the inclusion of its written opinion delivered to the board of directors, dated November 19, 2010, in this proxy statement.

          Moelis has acted as financial advisor to the Company with respect to the proposed Content Distribution transaction and will be entitled to receive a fee for its services calculated as provided below if the Content Distribution transaction is consummated. Pursuant to its engagement letter with the Company dated February 16, 2010, Moelis has also acted as financial advisor to the Company in connection with the Creative/Media transaction and is entitled to receive fees for its services. In addition, the Company has agreed to reimburse Moelis for certain expenses and to indemnify Moelis for certain liabilities arising out of its engagement.

          Pursuant to the engagement letter between the Company and Moelis, the Company has agreed to pay Moelis a single retainer fee of $150,000, an opinion fee of $250,000 for each fairness opinion requested by the Company, and a transaction fee based on a percentage of the aggregate transaction value, for each transaction consummated pursuant to the Company’s strategic alternatives process relating to AMG, subject to an aggregate minimum fee of $1,000,000; however, all amounts paid by the Company to Moelis as a retainer fee or an opinion fee with respect to any transaction will be credited to any transaction fee subsequently due Moelis for such transaction. To date, the Company has paid Moelis $1,250,000 in fees, representing the retainer fee, an opinion fee with respect to the opinion regarding the Content Distribution transaction (which is described above), and the portion of Moelis’ transaction fee applicable to the Creative/Media transaction. If the Content Distribution transaction is consummated, the aggregate additional transaction fee payable to Moelis in connection with the Content Distribution transaction is expected to be $1,125,000. In addition, the engagement letter between the Company and Moelis contemplates a discretionary success fee of up to $500,000, to be paid at the Company’s discretion. The determination of whether this fee shall be paid shall be exclusively determined by the Company.

          In the future, Moelis may provide investment banking and other services to the Company and Encompass and may receive compensation for the rendering of such services. In the ordinary course of business, Moelis, its successors and its affiliates may trade securities of the Company for our own accounts and the accounts of our customers and, accordingly, may at any time hold a long or short position in such securities.

Timing and Likelihood of Closing of the Content Distribution transaction

          We expect to complete the Content Distribution transaction as soon as practicable after all of the conditions to closing the Content Distribution transaction have been satisfied or waived. See “The Purchase and Sale Agreement—Conditions to the Transaction”. We currently plan to complete the Content Distribution transaction on or about February 28, 2011, assuming that our stockholders approve the transaction proposal and that each of the other conditions to the Purchase Agreement is satisfied or, where permissible, waived. If the closing of the Content Distribution transaction does not occur on or before February 28, 2011, the Company and Encompass will each have the right to terminate the Purchase Agreement and abandon the Content Distribution transaction. However, each of the parties currently expects that the Content Distribution transaction will close.

Proceeds from the Content Distribution transaction

          We expect to use the entire net proceeds from the Content Distribution transaction for general corporate purposes, which may include potential acquisitions. We have no current intention to distribute any proceeds of the transaction as a dividend or other distribution on our capital stock. See “The Company—Corporate Strategy”, above.

          Consistent with our ongoing acquisition strategy, we continue to seek opportunities to acquire operating businesses and other acquisition and investment opportunities that management believes will offer the potential for attractive returns on equity. We will consider potential acquisition candidates in a variety of industries, which may result in further changes in our operations, from our current and/or former businesses.

Effects of the Content Distribution transaction

          If the Content Distribution transaction is approved by our stockholders and the other conditions to closing of the transaction are satisfied or, where permissible, waived, we will sell our entire Content Distribution business unit to Encompass for $113,250,000 in cash, plus the assumption of certain liabilities and obligations with an estimated value on the date of the Purchase Agreement of approximately $6.75 million, subject to net working capital and certain other adjustments, on the terms and subject to the conditions set forth in the Purchase Agreement.

          Prior to the closing of the Content Distribution transaction, we have effected an internal reorganization, so that 100% of the assets and operations of our Content Distribution business unit is owned and operated by three indirect wholly-owned subsidiaries of the Company: Ascent Media Network Services, LLC (the US Company), which owns the assets and operations of Content Distribution in the United States; Ascent Media Network Services Europe Limited (the UK Company), which owns the assets and operations of Content Distribution in the United Kingdom; and Ascent Media Pte. Ltd. (the Singapore Company), which owns the assets and operations of Content Distribution in the Republic of Singapore. We sometimes refer to the US Company, the UK Company and the Singapore Company in this proxy statement as the Content Distribution Group Entities.

          At the closing of the Content Distribution transaction, Encompass Digital Media, Inc. (Encompass US) will purchase 100% of the outstanding ownership interests in the US Company, and Encompass Digital Media Limited (Encompass UK), a direct wholly-owned subsidiary of Encompass Digital Media, Inc., will purchase 100% of the outstanding shares of the UK Company and 100% of the outstanding shares of the Singapore Company, in each case for that portion of the purchase price allocable to those assets and operations and as otherwise provided in the Purchase Agreement. The purchase price for the outstanding equity interests of each of the Content Distribution Group Entities will be paid in cash. Upon consummation of the Content Distribution transaction, our remaining assets will consist of our wholly owned subsidiary Monitronics, the net proceeds of the Content Distribution transaction, our then existing cash and marketable securities (including the net proceeds of the Creative/Media transaction), certain real estate interests in Los Angeles and the UK, and our SI business (which we consider non-core), and assets used in the operation of our corporate and support functions.

          If the Content Distribution transaction is not completed for any reason, we intend to explore other strategic alternatives to maximize the value of our Content Distribution business for the benefit of our stockholders, including another sale, a joint venture or some other transaction. There can be no assurance that any other potential transaction to sell the Content Distribution business, whether alone or together with other businesses or assets, will provide consideration equal to or greater than the purchase price proposed to be paid by Encompass in the Content Distribution transaction, or that we will be able to complete an alternative transaction.

The Purchasers — Encompass Digital Media, Inc. and Encompass Digital Media Limited

          Encompass Digital Media Group, Inc. primarily provides outsourced technical solutions to broadcasters, content owners, cable channel operators and government departments from its independent broadcast facilities in Los Angeles and Atlanta.

          Formerly known as Broadcast Facilities, Inc., Encompass US began primary operations on April 1, 2008 upon the acquisition of the Andrita Media Center in Los Angeles. In January 2010, Encompass US acquired 100% of the satellite services division of Crawford Communications, Inc. in Atlanta.

          Encompass US’s principal business is cable channel origination and transmission and the provision of central broadcasting operations for local TV stations. In both, media is digitally captured from content provided by customers and a broadcast television signal is created using automated playback technology. The broadcast signal can be delivered using satellite, optical fiber, or the internet. Encompass US broadcasts both standard definition and high definition channels, and also has the capability of playing out live broadcasts.

          Encompass US also provides a number of other complementary services including:

	•		Occasional satellite and fiber transmission and mobile satellite services;
	•		Disaster recovery services;
	•		Providing the Defense Video and Imagery Distribution System for the public affairs division of the U.S. military, which produces, edits, and distributes video footage to media outlets; and
	•		Creating digital files for distribution as video on demand for cable and telephone provider head ends, and for other digital distribution points specified by customers.

          Encompass US’s clients are major networks and broadcasters, government departments, sports leagues and general entertainment cable channels. Encompass US is a Delaware corporation with its principal offices located at 3030 Andrita Street, Los Angeles, California 90065, telephone number (323) 344-4605.

          Encompass Digital Media Limited is a direct, wholly-owned subsidiary of Encompass US formed for the purpose of acquiring the UK Company and Singapore Company. Encompass UK is a private company incorporated in England and Wales with its principal offices located at 90 High Holborn, Seventh Floor, London WCIV 6XX.

Past Contacts, Transactions or Negotiations

          On several occasions during 2009, Simon Bax, the chief executive officer and a director of Encompass US, and Bill Tillson, the president and chief operating officer and a director of Encompass US, contacted William Fitzgerald, the chief executive officer of our Company. At various times during such discussions, which were general in nature, Mr. Bax and Mr. Tillson asked Mr. Fitzgerald if our company would be interested in discussing the possibility of a transaction combining our network origination and/or content distribution businesses with those of Encompass US. In response to such inquiries, Mr. Fitzgerald advised Mr. Bax and Mr. Tillson that our company was not then interested in any such transaction, and the matter was dropped from discussion.

          In November 2009, Mr. Bax approached Emily Keeton, then AMG’s senior vice president, corporate development, to arrange an introduction. On December 2, 2009, Ms. Keeton met with Mr. Bax and Mr. Tillson at Encompass US’s offices in Los Angeles. The conversation at this meeting was general in nature. During their discussion, Mr. Bax raised the possibility of a potential transaction that would combine AMG’s Content Distribution business with the business of Encompass US. However, Ms. Keeton stated that she was not authorized to entertain such an overture and the matter was dropped from discussion.

          Mr. Tillson, who is president and chief operating officer and a director of Encompass US, served as executive vice president of Compact Video from approximately 1988 through 1991. The assets of

Compact Video were acquired by 4MC-Burbank, Inc., which is now Ascent Media Services, LLC. Ascent Media Services, LLC, an indirect, wholly owned subsidiary of the Company, is part of the Company’s creative services and media management services business units.

Other Agreements and Transactions Related to the Content Distribution transaction

          In connection with the completion of the Content Distribution transaction, the Company, certain of its wholly-owned subsidiaries (including the Content Distribution Group Entities), and Encompass US have entered into nine separate services agreements, pursuant to which the parties agree to exchange specified services and benefits, including:

	•		technical and information technology assistance (including with respect to content preparation and management information systems, computer, data storage network and telecommunications services);
	•		e-mail and data extraction services for the transition to new independent technological systems;
	•		routine information technology support services;
	•		hierarchical storage management, content preparation, encoding, transcoding and electronic delivery services;
	•		continuation of global interconnect and metro fiber, syndication and video on demand services;
	•		permission to contact a certain customer to assist the transition to new facilities;
	•		financial services to close the books of the Company;
	•		storage services and access to certain elements stored in the Content Distribution business facilities;
	•		the lease of certain office equipment; and
	•		certain back-up power and generator support services.

          Pursuant to each agreement, the company or companies receiving services will make payments to the provider(s) based upon an agreed upon service fee or cost for each service, except in certain instances where services are provided free of fees or costs or where the Company and Encompass US will mutually agree upon commercially reasonable rates. Fees sometimes include personnel costs based upon applicable hourly rates. The company receiving services will also usually reimburse the provider for certain direct out-of-pocket costs incurred in connection with providing the services.

          Some of the services agreements took effect upon the signing of the Purchase Agreement or the divestiture of our Creative/Media business, while others will take effect in connection with the closings under the Purchase Agreement. The majority of the services are expected to be completed by six months following the closings of the Content Distribution transaction, with the exception of the continuation of the video on demand services which will be completed by December 31, 2012. Most of the services agreements will continue in effect until the completion of the services or the term set forth in each agreement, unless earlier terminated (1) by either party upon written notice to the other party, following such other party being the subject of certain bankruptcy or insolvency-related events, (2) by either party upon written notice to the other party, following a breach of the agreement by such other party that is not curable or is not cured within 20 days of the written notice, (3) by the company receiving services at any time on at least 15 days prior notice to the provider and (4) by mutual written agreement of the parties.

Accounting Treatment of the Content Distribution transaction

          The proposed sale of the Content Distribution Group Entities is expected to be accounted for as a sale of a business. Under accounting principles generally accepted in the United States, upon stockholder approval of the transaction proposal, although our evaluation is not complete, we expect to reflect the results of operations of the Content Distribution business as discontinued operations, including the related gain on the sale, net of any applicable taxes, commencing with the

quarter during which the Content Distribution transaction is probable of occurring and is approved by our stockholders. For further information, see the unaudited pro forma condensed financial information included in this proxy statement.

Risk Factors

          You should carefully consider the risk factors described below and those risk factors generally associated with our corporate strategy, the operations of the Content Distribution and Systems Integration businesses, our common stock and other matters contained in our Annual Report on Form 10-K for the year ended December 31, 2009 incorporated by reference to this proxy statement, along with other information provided to you in this proxy statement, in deciding how to vote on the transaction proposal.

          Risks Relating to our Post-Closing Business

          There can be no assurances that the Company will be successful in investing the proceeds of the Content Distribution Transaction.

          The process to identify potential investment opportunities and acquisition targets, to investigate and evaluate the future returns therefrom and business prospects thereof and to negotiate definitive agreements with respect to such transactions on mutually acceptable terms can be time consuming and costly. We have encountered intense competition from other companies with similar business objectives to ours, including private equity and venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these companies are well established and have extensive experience in indentifying and effecting business combinations.

          We will incur operating expenses, resulting from payroll, rent and other overhead and professional fees, while we are searching for an appropriate opportunities to invest the proceeds of the Content Distribution transaction.

          Because we will consider potential acquisition candidates in a number of different industry segments, stockholders have no basis at this time to ascertain the merits or risks of any business that we may ultimately operate.

          Our business strategy contemplates the potential acquisition of one or more operating businesses or other investments that we believe will provide better returns on equity than the operating businesses that we are selling, and we are not limited to acquisitions and/or investments in any particular industry or type of business. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business or businesses with which we may ultimately effect a business combination or other investment. Although we will seek to evaluate the risks inherent in a particular investment or acquisition opportunity, we cannot assure you that all of the significant risks present in that opportunity will be properly assessed. Even if we properly assess those risks, some of them may be outside of our control or ability to affect. We will not seek stockholder approval for any business combination or other investment that we may pursue, so you will most likely not be provided with an opportunity to evaluate the specific merits or risks of such a transaction before we become committed to the transaction.

          Resources will be expended in researching potential acquisitions and investments that might not be consummated.

          The investigation of target businesses and the negotiation, drafting and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention in addition to costs for accountants, attorneys and others. If a decision is made not to complete a specific business combination or other investment the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific opportunity, we may fail to consummate the transaction for any number of reasons, including those beyond our control.

          Risks Relating to the Content Distribution transaction

          The Content Distribution transaction may not be completed if the conditions to closing are not satisfied or waived.

          There is a risk that the Content Distribution transaction may not be completed because the conditions to closing, including stockholder approval and the absence of a material adverse event affecting the Company or the Content Distribution Group Entities before the closing, may not be satisfied or, where permissible, waived. If the Content Distribution transaction is not completed, we may be unable to find another buyer for the Content Distribution business or the terms offered by another buyer may not be as favorable to us as those in the Purchase Agreement.

          The amount of net proceeds that we receive is subject to uncertainties.

          Pursuant to the Purchase Agreement, the amount that we receive from Encompass is subject to the possibility of reduction by virtue of the purchase price adjustment described under “The Purchase and Sale Agreement—Purchase Price.” In addition, the amount of net proceeds is subject to further reduction after the closing if Encompass successfully asserts claims for indemnification pursuant to the indemnification provisions of the Purchase Agreement.

          We may not participate in a superior offer for the Content Distribution business unless we pay a termination fee to Encompass.

          The Purchase Agreement requires us to pay Encompass a termination fee equal to $4,530,000 if we terminate or Encompass terminates the Purchase Agreement prior to closing as a result of our board of directors changing its recommendation with respect to the Content Distribution transaction or determining to accept an unsolicited acquisition proposal that we determine to be a superior proposal.

          Risks Relating to our Common Stock

          Failure to complete the Content Distribution transaction could cause our stock price to decline.

          The failure to complete the Content Distribution transaction may create doubt as to the value of our Content Distribution business unit and our ability to effectively implement our current business strategies, which may result in a decline in our stock price.

Interests of Our Directors and Executive Officers in the Content Distribution transaction

          After the closing of the Content Distribution transaction, Encompass has agreed to indemnify and hold harmless our executive officers and directors from any loss arising out of any breach of representations and warranties by Encompass, or a failure of Encompass to perform covenants applicable to them under the Purchase Agreement. All of our directors and executive officers own shares of our common stock and/or restricted stock or options to purchase shares of our common stock, and to that extent, their interests in the Content Distribution transaction are the same as that of the other holders of our common stock. See “Security Ownership of Certain Beneficial Owners and Management—Security Ownership of Management” below.

No Appraisal Rights

          Holders of the Company’s common stock will not have appraisal or dissenters’ rights in connection with the Content Distribution transaction. Neither Delaware law nor our certificate of incorporation provides the Company’s stockholders with appraisal or dissenters’ rights in connection with the Content Distribution transaction. The Company’s Series A common stock will remain publicly traded on The NASDAQ Global Select Market following the consummation of the Content Distribution transaction.

Financing; Source and Amount of Funds

          The Content Distribution transaction is not conditioned upon Encompass obtaining financing. Encompass US received a financing commitment from an affiliate of Macquarie Capital (USA) Inc., subject to certain conditions as described below, to provide a new senior secured credit facility (the New Credit Facility), including a term loan facility of $175 million. The proceeds of this new term loan facility will be used in part to pay, and are expected to be sufficient to pay, the Estimated Purchase Price (as defined below). In addition, Encompass US has received a commitment from lenders under its existing secured credit facility (the Existing Lenders) to amend such credit facility to support the consummation of the Content Distribution transaction, subject to certain conditions as described below.

          The commitments described above are subject to customary conditions, including, but not limited to

	•		absence of a “material adverse effect” (as defined in the Purchase Agreement) with respect to the Content Distribution Group Entities, Encompass US and its subsidiaries, taken as whole;
	•		consummation of the Content Distribution transaction in accordance with the Purchase Agreement, with no amendments or waivers thereto that are materially adverse to the interests of the lenders under the New Credit Facility and the Existing Lenders being agreed to by the US Purchaser without the consent of such lenders;
	•		pro forma compliance with certain leverage ratios;
	•		solvency of Encompass US and each of the guarantors under each such facility;
	•		execution of documentation, including an intercreditor agreement, reasonably satisfactory to the lenders under the New Credit Facility and the Existing Lenders; and

•

closing no later than February 28, 2011.

Vote and Recommendation

          The transaction proposal requires approval by the affirmative vote of the holders of record, as of the record date, of a majority of the aggregate voting power of the shares of our common stock outstanding and entitled to vote at the special meeting, voting together as a single class.

          Our board of directors has approved and declared the Purchase Agreement and the transaction proposal and the transactions contemplated thereby, including the Content Distribution transaction, advisable, fair to, and in the best interests of the Company and its stockholders, and recommends that the holders of our common stock vote “FOR” the transaction proposal.

MATERIAL TAX CONSEQUENCES

Certain United States Federal Income Tax Consequences

          The following is a general discussion of the material United States federal income tax consequences to the Company of the sale of the Content Distribution business to Encompass. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the Code), current and proposed US Treasury Regulations, judicial authority, and administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis and are subject to different interpretations. There can be no assurances that the Internal Revenue Service (IRS) will not challenge the tax treatment of certain matters discussed, and no ruling has been sought from the IRS as to the federal income tax consequences of the sale.

          The sale of the US Company to Encompass US pursuant to the Purchase Agreement will be a taxable transaction with respect to the Company. Because the US Company and all its subsidiaries are “pass-through” entities for United States federal income tax purposes, for such purposes the sale will be treated as a sale of the assets held by such entities. The Company will recognize a gain or loss measured by the difference between the amount realized from the sale and the Company’s tax basis in the assets deemed sold. The amount realized by the Company will include the cash received by it and any other consideration received by it for the assets. For purposes of determining the amount realized by the Company with respect to specific assets, the total amount realized will be allocated among the assets of each entity conducting the Content Distribution business according to rules prescribed under Section 1060 of the Code. The Company’s basis in the assets of the US Company is generally equal to the cost of such assets adjusted for depreciation or amortization. Although it is expected that the sale will result in a gain for United States federal income tax purposes, it is estimated that the Company has sufficient losses (including net operating loss carry-forwards) to generally offset such gain. The Company may be subject to United States federal alternative minimum tax.

          The sale of the UK Company and the sale of the Singapore Company to Encompass UK should not cause the Company to recognize any income or gain for United States federal income tax purposes. However the repatriation of the proceeds of such sales to the Company will be taxable in part as dividend income. It is estimated that the Company has sufficient losses (including net operating loss carry forwards) to generally offset such dividend income. The Company may be subject to United States federal alternative minimum tax with respect to such dividend income.

          The Company does not expect that any of the sales will result in any United States federal income tax consequences to our stockholders.

Certain United Kingdom Tax Consequences

          The sale of the Singapore Company will be a taxable sale for United Kingdom income tax purposes and is expected to result in a gain. However it is expected that such gain will be offset by a loss on the sale of the UK Company. The sale of the UK Company will result in United Kingdom transfer tax liability, of which the Company’s share under the Purchase Agreement is expected to be about $54,000. The internal reorganization effected prior to the Content Distribution transaction may result in United Kingdom transfer taxes of approximately $125,000.

Certain Singapore Tax Consequences

          The sale of the Singapore Company is exempt from Singapore income taxation. Such sale will result in Singapore transfer tax liability, of which the Company’s share under the Purchase Agreement is expected to be about $35,000.

REGULATORY MATTERS

          The Content Distribution transaction is subject to the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), the Communications Act of 1934, as amended (the Communications Act) and the Telecommunications Act of 1999 of Singapore, as amended (the Telecommunications Act). The HSR Act provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice, which we refer to as the DOJ, and the Federal Trade Commission, which we refer to as the FTC, and certain waiting period requirements have been satisfied. Pursuant to the HSR Act, on December 3, 2010 each of our Company and

Encompass filed a Notification and Report Form for Certain Mergers and Acquisitions in connection with the Content Distribution transaction with the DOJ and FTC. On December 13, 2010, we were notified that we had been granted early termination of the waiting period under the HSR Act. The Creative/Media transaction was not subject to the notification and waiting period requirements of the HSR Act, because the aggregate consideration received by the Company from the sale of the U.S. assets and operations of Creative Services and Media Services is less than the transaction value threshold of $64.3 million under the act.

          Under the Communications Act, our Company and Encompass may not consummate the Content Distribution transaction unless they have first obtained the approval of the FCC to transfer control of the US Company and any FCC licenses held by the US Company to Encompass. FCC approval is sought through the filing of applications with the FCC, which are subject to public comment and objections from third parties. Although no assurances can be given, we expect the FCC approval process to be completed prior to the expected closing date of February 28, 2011. The Company and Encompass submitted joint applications with the FCC on December 3, 2010.

          The Creative/Media transaction was not subject to FCC approval.

          Pursuant to the Telecommunications Act and Code of Practice for Competition in the Provision of Telecommunication Services 2005 (Republic of Singapore) (Telecom Competition Code), any consolidation involving designated telecommunication licensees (including facilities-based operator licensees such as Ascent Media Pte. Ltd.) require the approval of the Infocomm Development Authority of Singapore (IDA). Generally speaking, the acquiring party and the licensee that is the subject of the consolidation are required to submit a joint application to IDA for the required approval within 30 days of the execution of the privately-negotiated agreement that would, once approved by IDA, result in the consolidation. IDA would generally complete a preliminary review of the consolidation application within 5 working days to determine whether further information is required, and complete the consolidation review within 30 days from the start of the consolidation review period. The consolidation review period is deemed to commence once the applicants satisfy the minimum information requirements.

          Although no assurances can be given, the IDA approval process is expected to be completed prior to the expected closing date of February 28, 2011. The Company and Encompass submitted a joint application with the IDA on December 9, 2010.

          The Creative/Media transaction was not subject to IDA approval.

THE PURCHASE AND SALE AGREEMENT

          The following is a summary of the material terms of the Purchase Agreement. This summary does not purport to describe all the terms of the Purchase Agreement and is qualified by reference to the complete text of the Purchase Agreement, which is attached as Annex B to this proxy statement. We urge you to read the Purchase Agreement carefully and in its entirety because it, and not this proxy statement, is the legal document that governs the Content Distribution transaction.

          The text of the Purchase Agreement has been included to provide you with information regarding its terms. The terms of the Purchase Agreement (such as the representations and warranties) are intended to govern the contractual rights and relationships, and allocate risks, between the parties in relation to the Content Distribution transaction. The Purchase Agreement contains representations and warranties that our Company, on the one hand, and Encompass on the other hand, made to each other as of specific dates. The representations and warranties were negotiated between the parties with the principal purpose of setting forth their respective rights with respect to their obligations to consummate the Content Distribution transaction and may be subject to important limitations and qualifications as set forth therein, including a contractual standard of materiality different from that generally applicable under federal securities laws.

          In addition, the representations and warranties of our company, certain covenants and other provisions are qualified by information in confidential disclosure schedules that our Company has delivered to Encompass in connection with signing the Purchase Agreement. While we do not believe that the disclosure schedules contain information that the securities laws require to be publicly disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties, certain covenants and other provisions set forth in the attached Purchase Agreement. Accordingly, you should not rely on the representations and warranties, covenants and other provisions as characterizations of any actual state of facts, since they are modified by the underlying disclosure schedules. These disclosure schedules contain information that has been included in our prior public disclosures, as well as potential additional non-public information. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in our public disclosures.

          This section is not intended to provide you with any other factual information about us. Such information can be found elsewhere in this proxy statement and in the public filings we make with the SEC, as described in the section entitled “Additional Information—Where You Can Find Additional Information.” Capitalized terms used, and not otherwise defined, in this summary have the meanings given to them in the Purchase Agreement.

The Content Distribution Transaction

          We have agreed to sell our Content Distribution business unit to Encompass. The terms and conditions of the Content Distribution transaction are set forth in the Purchase Agreement, dated December 2, 2010, between the Company and certain of its direct and indirect wholly-owned subsidiaries, on the one hand, and Encompass US and Encompass UK (collectively, Encompass), on the other. A copy of the Purchase Agreement is attached to this proxy statement as Annex B.

          The Purchase Agreement provides that, prior to the consummation of the Content Distribution transaction, we will restructure certain of our subsidiaries and assets, so that the Content Distribution business unit is owned and operated entirely by the Content Distribution Group Entities. We refer to this restructuring as the Company Group Reorganization. As a result of the Company Group Reorganization, immediately prior to the consummation of the Content Distribution transaction, 100% of the assets and operations of our Content Distribution business unit will be owned and operated by three indirect wholly-owned subsidiaries of the Company:

	•		Ascent Media Network Services, LLC (the US Company), which will own the assets and operations of Content Distribution in the United States;
	•		Ascent Media Network Services Europe Limited (the UK Company), which will own the assets and operations of Content Distribution in the United Kingdom; and

•

Ascent Media Pte. Ltd. (the Singapore Company), which will own the assets and operations of Content Distribution in the Republic of Singapore.

We sometimes refer to the US Company, the UK Company and the Singapore Company in this proxy statement as the Content Distribution Group Entities. We refer to the date the Content Distribution transaction is consummated as the Closing Date.

          Pursuant to the Purchase Agreement, on the Closing Date:

	•		Encompass US will purchase 100% of the outstanding ownership interests in the US Company;
	•		Encompass UK will purchase 100% of the outstanding shares of the UK Company; and
	•		Encompass UK will purchase 100% of the outstanding shares of the Singapore Company;

in each case for the portion of the purchase price allocable to those assets and operations and as provided in the Purchase Agreement. We refer to the ownership interests in the US Company and the shares of the UK Company and Singapore Company to be purchased by Encompass collectively as the Company Interests. We refer to the consummation of such purchases pursuant to the Purchase Agreement as the Closings.

Purchase Price

          Pursuant to the Purchase Agreement, the aggregate net cash purchase price to be paid by Encompass for the Company Interests (which we refer to as the Purchase Price), is equal to $113,250,000 (which we refer to as the Base Purchase Price), subject to the following adjustments:

     Net Working Capital

          The Purchase Agreement defines “Target Working Capital” as $3,934,000. If at the Closing Date, the net working capital of the Content Distribution business unit (as defined and calculated pursuant to the Purchase Agreement) exceeds Target Working Capital, the Purchase Price will be increased by such excess. If net working capital is less than Target Working Capital, the Purchase Price will be reduced by such deficit.

     Cash Deferred Revenue

          The Purchase Agreement defines “Cash Deferred Revenue” as the portion of deferred revenue (both current and long-term) associated with cash received from customers, together with any other liabilities associated with any cash deposits or upfront payments received from customers. The Purchase Price will be reduced by the Cash Deferred Revenue of the Content Distribution business unit as at the Closing Date. Such Cash Deferred Revenue will be excluded from the calculation of net working capital to avoid double counting.

     Capital Expenditures

          The Purchase Agreement requires us to continue to incur and pay for certain previously budgeted capital expenditures relating to the Content Distribution business unit in the ordinary course of business consistent with past practice, through the Closing Date. Such capital projects have been projected to cost an aggregate of $17,256,000 from October 6, 2010 through December 31, 2010 and may entail additional capital expenditures thereafter through the Closing Date. If at the Closing Date, the amount paid in cash by us for such capital projects is less than $17,256,000, the Purchase Price will be reduced by such deficit. However, if we incur additional capital expenditures between October 6, 2010 and the Closing Date (other than expenditures relating to such previously budgeted projects or general maintenance), and Encompass consents or such additional capital expenditure is reasonably incurred, after good faith consultation with Encompass US, in connection with new customers, the renewal of a certain customer contract or certain expansions or enhancements of services to existing customers, the Purchase Price will be increased by the aggregate amount of such additional investments.

     Real Estate Credit

          The Purchase Agreement requires us to use commercially reasonable efforts to transfer to the US Company certain real property currently owned by us but used in connection with the Content Distribution business. If such transfer of real property is not consummated prior to the Closing Date, the Purchase Price will be reduced by $1,000,000. If such transfer of real property is then consummated following the Closing Date and prior to December 31, 2015, Encompass will pay us $1,000,000 for such property.

     Estimated Purchase Price and Post-Closing Adjustment

          Not less than five business days prior to the anticipated Closing Date, we will provide Encompass with a statement setting forth our good faith estimate of the Purchase Price, taking into account the adjustments described above. We refer to such estimate as the Estimated Purchase Price. The Purchase Agreement provides that, on the Closing Date, Encompass shall pay us the Estimated Purchase Price in cash. Following the Closings, the parties will determine the final Purchase Price based on the actual net working capital, Cash Deferred Revenue, and capital expenditures of the Content Distribution business unit at or through the Closing Date, as applicable. Any disputes concerning the final Purchase Price shall be resolved by binding arbitration before Deloitte & Touche LLP or another internationally recognized independent public accounting firm. Within three business days after the Purchase Price has been finally determined, Encompass shall pay to us the amount, if any, by which the final Purchase Price exceeds the Estimated Purchase Price, or we shall pay to Encompass the amount, if any, by which the Estimated Purchase Price exceeds the final Purchase Price.

     Allocation of Purchase Price

          For purposes of paying the Estimated Purchase Price at the Closings, 70% of the Estimated Purchase Price will be paid for the outstanding ownership interests of the US Company and 30% will be paid collectively for the outstanding shares of the UK Company and the Singapore Company. The actual Purchase Price shall be allocated by Encompass after the Closing Date among the Content Distribution Group Entities (and, for tax purposes, among their respective assets) with the approval of the Company, which approval shall not be unreasonably withheld, conditioned or delayed.

     Assumption of Liabilities and Excluded Liabilities

          In addition to the cash Purchase Price, at the Closings, Encompass will assume certain liabilities and obligations relating to the Content Distribution business with an estimated fair value on the date of the Purchase Agreement of approximately $6.75 million, comprising approximately $3.0 million in capital lease obligations under a full-time satellite transponder capacity agreement, $3.5 million in dilapidation liability under an existing real property lease, and $250,000 obligations under an existing lease for unused office space. We have also agreed with Encompass to exclude certain liabilities of the Company and its subsidiaries, including the Content Distribution Group Entities, such that we, and not Encompass, will be responsible for such liabilities following the closing date.

Closing Date

          Subject to the satisfaction or waiver of the conditions provided for in the Purchase Agreement, the Closings will occur on February 28, 2011, or such earlier date on or after January 31, 2011 as we may specify on at least 20 business days prior written notice; provided, however, that we may not specify an earlier date for the Closings unless the conditions set forth in the Purchase Agreement relating to the waiting period under the HSR Act, FCC approval, IDA approval, and certain third-party consents have been satisfied on or prior to the date of such notice, and the Special Meeting has been scheduled to take place on or before such specified closing date. We currently expect the Closings to occur during the first quarter of 2011.

Conditions to the Transaction

     Conditions to Each Party’s Obligations

          Each party’s obligation to consummate the transactions contemplated by the Purchase Agreement, including the Content Distribution transaction, is subject to satisfaction or waiver of the following conditions:

	•		approval of the transaction proposal by the holders of a majority of the voting power of the outstanding shares of our common stock entitled to vote thereon;
	•		the waiting period under the HSR Act and any extension thereof shall have expired or been terminated;
	•		required approvals from the FCC and IDA shall have been obtained;

	•		no governmental law or order shall be in force that makes the Content Distribution transaction illegal or otherwise prohibits or imposes materially burdensome conditions on the Content Distribution transaction;
	•		no person shall have instituted a claim that would reasonably be expected to prohibit or impose materially burdensome conditions on the Content Distribution transaction; and
	•		specified third-party consents shall have been obtained.

     Conditions to Purchasers’ Obligations

          The obligation of Purchasers to consummate the Content Distribution transaction is subject to the satisfaction or waiver of the following additional conditions:

	•		each of certain fundamental representations made by our Company and its subsidiaries shall be true and correct as of the date of the Purchase Agreement and the date of the closing of the Content Distribution transaction;
	•		the other representations and warranties made by our Company and its subsidiaries shall be true and correct as of the date of the Purchase Agreement and the date of the closing of the Content Distribution transaction, except where failure of such representations and warranties to be true and correct would not have a material adverse effect;
	•		our Company and its subsidiaries shall have performed in all material respects their agreements and covenants under the Purchase Agreement;
	•		delivery of requisite items by us to Encompass pursuant to the Purchase Agreement, including executed copies of certain real property leases and a sublease and documents relating to the transfer of certain real property and the granting of certain easements;
	•		the Company Group Reorganization shall have been consummated and written proof thereof shall have been delivered to Encompass;
	•		the FCC approvals shall have become final, or no third-party shall have made any filing associated with the applications; and
	•		certain specified contracts between our Company and certain of our customers shall be in full force and effect, and we shall not be in material breach of our obligations thereunder.

     Conditions to our Company’s Obligations

          Our obligation to consummate the Content Distribution transaction, is subject to the satisfaction or waiver of the following further conditions:

	•		each of certain fundamental representations made by Encompass shall be true and correct as of the date of the Purchase Agreement and the date of the closing of the Content Distribution transaction;
	•		the other representations and warranties made by Encompass shall be true and correct as of the date of the Purchase Agreement and the date of the closing of the Content Distribution transaction, except where failure of such representations and warranties to be true and correct would not have a material adverse effect;
	•		Encompass shall have performed in all material respects their agreements and covenants under the Purchase Agreement; and
	•		delivery of requisite items by Encompass to us pursuant to the Purchase Agreement, including executed copies of certain real property leases and a sublease.

Representations and Warranties

          The Purchase Agreement contains a number of representations and warranties made by our Company and its subsidiaries applicable to our Company, the Content Distribution Group Entities, and certain other subsidiaries of our Company that immediately prior to the closing of the Content Distribution transaction will directly hold all the Company Interests. Such representations and warranties are subject to certain qualifications and exceptions set forth in the Purchase Agreement or in the confidential disclosure schedules provided by the Company to Encompass pursuant to the Purchase Agreement, and relate to, among other things, the following:

	•		due organization, valid existence, good standing and other corporate matters;
	•		authorization, execution, delivery and enforceability of the Purchase Agreement and ancillary agreements;
	•		conflicts or violations under organizational documents, contracts or law;
	•		pending material litigation or outstanding material orders against our Company or certain subsidiaries;
	•		sufficiency of our title to the interests of the Content Distribution Group Entities;
	•		solvency of our Company and certain subsidiaries;
	•		governmental permits and licenses;
	•		material compliance with applicable laws;
	•		capitalization and corporate structure of the Content Distribution business;
	•		financial statements;
	•		absence of undisclosed liabilities;
	•		absence of certain material changes or events;
	•		material pending or threatened claims or orders related to the Content Distribution Group Entities or initiated by any of the Content Distribution Group Entities;
	•		related party transactions between the Company and our affiliates or their respective representatives;
	•		employees and employment matters relating to the Content Distribution business;
	•		matters relating to employee benefits applicable to us;
	•		taxes;
	•		intellectual property matters;
	•		leased and owned real property;
	•		material contracts and leases;
	•		material insurance policies;
	•		environmental matters;
	•		status of the Company’s business relationships with certain customers and suppliers, including the status of certain material contracts;

	•		condition of tangible property used to conduct the Content Distribution business;
	•		sufficiency of properties and assets used to conduct the Content Distribution business;
	•		validity of accounts receivable relating to the Content Distribution business, subject to reserves and the adequacy of these reserves in accordance with GAAP;
	•		the preparation of any proxy statement related to the Content Distribution transaction;
	•		brokerage or finders’ fees with respect to the Content Distribution transaction;
	•		absence of certain indebtedness, and absence of certain expenses relating to the Content Distribution transaction;
	•		completion of the Company Group Reorganization; and
	•		the absence of any cash deposits that the Company Group would be obligated to return.

          The Purchase Agreement also contains various representations and warranties made by Encompass (which representations and warranties are subject to certain qualifications and exceptions set forth in the Purchase Agreement), relating to, among other things, the following:

	•		due organization, valid existence and good standing and other corporate matters;
	•		authorization, execution, delivery and enforceability of the Purchase Agreement and ancillary agreements;
	•		conflicts or violations under organizational documents, contracts or law;
	•		pending or threatened material litigation or outstanding material orders;
	•		no financing contingency;
	•		solvency; and
	•		brokerage or finders’ fees with respect to the transactions contemplated by the Purchase Agreement.

Certain Covenants and Agreements

          Under the Purchase Agreement, we have agreed to abide by certain covenants prior to the closing of the Content Distribution transaction. Among others, these covenants include the following:

     Conduct of the Business by our Company Prior to the Closings

          Under the Purchase Agreement, we have agreed that, subject to certain exceptions, between the signing of the Purchase Agreement and the closing of the Content Distribution transaction, we will operate the Content Distribution business in all material respects in the ordinary course of business, consistent with past practice. We have also agreed that, subject to certain exceptions, we will cause each of the Content Distribution Group Entities not to:

	•		amend its organizational documents;
	•		transfer, issue, sell, grant, redeem or dispose of any equity interests or securities of any Content Distribution Group Entity or grant any option, warrant, call or other right to purchase such interests;
	•		declare, set aside, or pay dividends or other distributions;
	•		sell, assign, transfer, lease or otherwise dispose of material assets or properties of the Content Distribution Group Entities or the Content Distribution business;

	•		acquire or agree to acquire any business of any other person;
	•		incur any indebtedness, make loans or advances, or assume, guarantee or endorse the obligations of any other person (other than to another Content Distribution Group Entity);
	•		subject any material asset of the Content Distribution Group Entities to a non-permitted lien;
	•		make any material change to any accounting method or practice;
	•		enter into or modify any related party agreement;
	•		enter into, modify or terminate any material contract or leases (other than as permitted in accordance with the Purchase Agreement);
	•		increase compensation or benefits for, or grant severance or termination pay to, any employee of the Content Distribution Group Entities (other than as permitted in accordance with the Purchase Agreement);
	•		enter into, modify or terminate any employee benefit plan;
	•		enter into, modify or terminate any collective bargaining agreement or otherwise make any commitment or incur any liability to any labor organization;
	•		make or change any tax elections, extend or waive the statute of limitations for material tax claims, surrender any tax refund, settle any material tax liability, or make any material change to the tax practice as each relates to the Content Distribution Group Entities;
	•		discount any receivables outside the ordinary course of business;
	•		settle any claim that would impose continuing obligations on any Content Distribution Group Entity;
	•		hire new employees above a certain pay grade; or
	•		terminate employees in the Content Distribution business without cause.

          In addition, we have agreed to use our commercially reasonable efforts to preserve the business organization and assets of the Content Distribution business, the beneficial business relationships and goodwill of customers, suppliers and other business relationships relating to the Content Distribution business, and the availability of the services of certain employees, directors, officers and consultants.

     Proxy Statement; Stockholder Meeting

          We have agreed to use our reasonable best efforts to prepare a proxy statement and all necessary filings relating to the stockholder vote and meeting and to provide Encompass with a right to review such materials. In addition, we have agreed, acting through our board of directors, to establish a record date for, duly call, give notice of, convene and hold a meeting of the holders of the Company’s common stock for the purpose of voting upon the approval of the Content Distribution transaction as promptly as reasonably practicable. In connection with such vote, we will solicit proxies from our stockholders in favor of the approval of the Content Distribution transaction. We will pay all costs associated with the filing of, and solicitation of proxies in connection with, this proxy statement.

     No Solicitation; Superior Proposal

          Pursuant to the Purchase Agreement, we have agreed that from the signing of the Purchase Agreement until the consummation of the Content Distribution transaction or the earlier termination of the Purchase Agreement, we will not, and will cause our representatives and affiliates not to, take any of the following actions, except as otherwise permitted by the Purchase Agreement:

•

solicit, initiate or encourage any competing proposal (as defined below);

	•		participate in any negotiations or discussions regarding any competing proposal;
	•		furnish any nonpublic information with respect to any competing proposal;
	•		approve or recommend any competing proposal; or
	•		enter into any agreement or understanding providing for any competing proposal or requiring us to abandon, terminate or fail to consummate the Content Distribution transaction.

          However, if prior to the approval of the transaction proposal at the special meeting, (i) we receive a competing proposal that constitutes a superior proposal (as defined below), or that our board of directors determines in good faith could reasonably be expected to result in a superior proposal, and (ii) our board of directors determines that the failure to take such action would be reasonably likely to constitute a breach of the board’s fiduciary duties under applicable law, then so long as we comply with the relevant provisions of the Purchase Agreement, we may:

	•		participate in any negotiations or discussions regarding such competing proposal; or
	•		furnish any nonpublic information with respect to such competing proposal.

          We are required to promptly notify Encompass of the receipt of any competing proposal and the material terms of any competing proposal.

          If, prior to the approval of the transaction proposal at the special meeting, (i) we receive a competing proposal that constitutes a superior proposal, and (ii) our board of directors determines that the failure to take such action would be reasonably likely to constitute a breach of the board’s fiduciary duties under applicable law, the board may change or withdraw its recommendation to you in favor of the transaction proposal and, after providing Encompass with an opportunity to respond to such superior proposal, we may terminate the Purchase Agreement, and enter into an agreement with respect to such superior proposal, provided that prior to the effectiveness of any such termination we pay a termination fee to Encompass of $4,530,000, in cash. See “Purchase and Sale Agreement — Termination Fees”.

          As used in this proxy statement, the term “competing proposal” means a bona fide proposal relating to (i) a merger or similar transaction involving our company or a Content Distribution Group Entity, (ii) an acquisition of 25% or more of our consolidated assets (other than an acquisition of assets not involving any assets of the Content Distribution business), (iii) an acquisition of 25% or more of any class of our common stock, (iv) certain tender or exchange offers, (v) the acquisition of one or more Content Distribution Group Entities, (vi) the acquisition, directly or indirectly, of any assets of the Content Distribution business, other than in the ordinary course of business, or (vii) the acquisition of all or any part of the Company Interests.

          As used in this proxy statement, the term “superior proposal” means any written competing proposal that was not solicited, initiated, or encouraged by us or our representatives in violation of the Purchase Agreement for a transaction that would result in any person or group beneficially owning more than 50% of the voting power of our common stock or acquiring all or substantially all (as defined for purposes of Section 271 of the Delaware General Corporation Law) of our consolidated assets, on terms that our board of directors determines in good faith are more favorable from a financial point of view to our company and its stockholders than the Content Distribution transaction, and that our board of directors has determined is reasonably likely to be completed on the terms proposed.

Appropriate Action; Consents; Filings

          The parties have agreed to use their respective reasonable best efforts to consummate the Content Distribution transaction and to cause all of the conditions to the consummation of the Content Distribution transaction to be satisfied, including:

	•		obtaining necessary consents and approval from governmental authorities or other persons;
	•		making filings and submissions required to be made under the HSR Act by the Company and Encompass and preparing and submitting any applications necessary to receive the necessary regulatory approvals from the FCC and IDA; and

•

providing notice or obtaining consents from any third-parties necessary for the consummation of the transactions contemplated by the Purchase Agreement.

     Company Group Reorganization; Affiliate Transactions; Parent Release

          We have agreed that, prior to the Closing Date, we will consummate the Company Group Reorganization and terminate any liabilities and obligations between any of the Content Distribution Group Entities, on the one hand, and us or our subsidiaries (other than Content Distribution Group Entities), on the other hand. In addition, we have agreed to waive any claim against the Content Distribution Group Entities and release the Content Distribution Group Entities from any liabilities related to these claims.

     Assumed Guarantees and Contracts

          Encompass has agreed to use commercially reasonable efforts to procure our release from liabilities under certain guarantees, which we refer to as “assumed guarantees,” so long as Encompass is not required to make payments or provide letters of credit or similar credit support. Encompass has further agreed not to extend beyond the original term or increase, in any material respect, our liability under assumed guarantees without our consent.

Tax Matters

          We will be responsible for all taxes relating to the Content Distribution business with respect to any periods ending on or before the Closing Date, and, in the case of any period beginning on or before and ending after the Closing Date, for all taxes allocable to the portion of such period occurring on or before the Closing Date. Encompass will be responsible for all taxes relating to the Content Distribution business with respect to any periods beginning after the Closing Date, and, in the case of any period beginning on or before and ending after the Closing Date, for all taxes allocable to the portion of such period occurring after the Closing Date. We will be responsible for any transfer taxes relating to the Company Group Reorganization. Any other transfer taxes relating to the Content Distribution transaction will be borne 50% by our company and 50% by Encompass. The purchase agreement provides for us to indemnify Encompass and its affiliates for taxes and related expenses allocated to our company under the Purchase Agreement, and for taxes or losses arising from any breach by our company of the representations and warranties or covenants of our company related to taxes set forth in the Purchase Agreement. The purchase agreement provides for Encompass to indemnify us and our affiliates for taxes and related expenses allocable to Encompass. Such tax indemnification provisions are not subject to the basket or cap applicable to indemnification for breaches of certain representations, warranties and covenants under the Purchase Agreement. See “The Purchase and Sale Agreement —Indemnification; Survival of Indemnification Obligations” below.

Employee Matters

          We will be responsible for compensation and related costs payable with respect to any employees of the Company and its subsidiaries, including employees working in the Content Distribution business, for all periods through the Closing Date, and for all employees other than employees working in the Content Distribution business (or otherwise designated by Encompass as continuing employees) for periods following the Closing Date, and will be responsible for severance and related costs for all employees terminated on or prior to the Closing Date. We will also be responsible for all liabilities relating to any employee benefit plans relating to the Content Distribution business, other than liabilities incurred after the Closing Date for employee benefit plans that Encompass has specifically agreed to assume. Encompass will be responsible for all compensation and related costs payable with respect to employees working in the Content Distribution business, as well as any other employees of AMC and its subsidiaries designated by Encompass to work in the Content Distribution business following the Closing Date (collectively, continuing employees) for periods following the Closing Date, including severance and related costs for any such employees terminated after the Closing Date. In addition, if Encompass or any of its affiliates hires a former employee of AMC or its affiliates other than a continuing employee within 90 days following the Closing Date, Encompass or such affiliate shall pay any severance costs incurred by AMC or its affiliate in connection with the termination of such employee.

          The Company will be responsible for (i) fully vesting Continuing Employees in their benefits under the Ascent Media Group 401(k) Savings Plan (the AMG 401(k)) and (ii) contributing all contributions due for all pay periods leading up to and including the Closing Date of the Content Distribution transaction with respect to the compensation earned by such employees as of the Closing Date. As soon as practicable after the closing of the Content Distribution transaction (but no earlier than the 60th day following the Closing Date), Encompass and the Company will arrange for the transfer of accounts for participating

Continuing Employees from the AMG 401(k) to a comparable plan sponsored by Encompass, including a transfer of assets from the AMG 401(k) to the Encompass plan.

Indemnification; Survival of Indemnification Obligations

     Indemnification by the AMC Entities

          Subject to certain limitations set forth in the Purchase Agreement, following the consummation of the Content Distribution transaction, the Company and certain of its subsidiaries will, jointly and severally, indemnify Encompass and its affiliates and representatives against damages arising out of or resulting from (i) any breach of a representation or warranty made by the Company or a subsidiary in the Purchase Agreement or certain ancillary documents, (ii) any breach or failure by the Company or a subsidiary to perform any of its covenants or obligations in the Purchase Agreement or certain ancillary agreements and (iii) any excluded liabilities or related third-party claims. The Purchase Agreement also provides for mutual indemnification with respect to certain tax matters. See “Purchase and Sale Agreement—Tax Matters” above.

     Indemnification by Purchasers

          Subject to certain limitations set forth in the Purchase Agreement, following the consummation of the Content Distribution transaction, Encompass and certain of its subsidiaries will, jointly and severally, indemnify the Company and its affiliates and representatives against damages arising out of or resulting from (i) any breach of a representation or warranty made by Encompass in the Purchase Agreement or certain ancillary agreements, (ii) any breach or failure by Encompass to perform any of their covenants or obligations in the Purchase Agreement or certain ancillary agreements, or (iii) any assumed guarantee. The Purchase Agreement also provides for mutual indemnification with respect to certain tax matters. See “Purchase and Sale Agreement—Tax Matters” above.

     Limits on Indemnification

          The Purchase Agreement provides that, subject to the exceptions described below, the aggregate liability of the Company for indemnification for damages arising out of or resulting from breaches of our representations and warranties, as well as certain covenants relating to the operation of the Content Distribution business between signing and closing, will not exceed $19,360,000. In addition, the Company will not be liable for indemnification for damages arising out of or resulting from these types of breaches unless and until the aggregate amount of such damages exceeds $1,550,000, and then only for the amount by which such damages exceed $1,550,000.

          Such limitations do not apply to (i) any breach or failure to be true of certain fundamental representations and warranties of the Company, including the due organization, valid existence and good standing of the Company and the Content Distribution Group Entities, and our legal capacity and authority to perform our obligations under the Purchase Agreement, or (ii) any other covenant breaches or indemnification obligations.

          The liability of Encompass under the indemnification provisions set forth in the Purchase Agreement are subject to comparable limitations as those in favor of the Company.

          Under certain circumstances, if the Company and its subsidiaries desire to windup or make certain distributions, we will first need to deposit into escrow an amount of cash equal to what remains under the indemnification cap to support our indemnification obligations under the Purchase Agreement.

Termination

          The Purchase Agreement may be terminated and the Content Distribution transaction and the other transactions contemplated thereby abandoned at any time prior to the consummation of such transactions and before or after approval of the Content Distribution transaction by our stockholders:

	•		by mutual written consent of us and Encompass;
	•		by us or Encompass, if (1) the closing has not occurred by February 28, 2011, (2) any governmental authority of competent jurisdiction has issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting or imposing materially burdensome conditions on the consummation of the transactions contemplated by the Purchase Agreement, and such order or other

			action has become final and non-appealable, or (3) stockholder approval of the transaction proposal is not obtained at the special meeting (in which case, we shall be required to pay Encompass’s out-of-pocket costs and expenses incurred in connection with the Content Distribution transaction not to exceed $2,000,000);
	•		by us, if (1) Encompass has breached representations, warranties, covenants or other agreements which leads to a violation of applicable closing conditions and cannot be cured by February 28, 2011 or if curable, is not cured within 30 days of our notice of intent to terminate, or (2) our board of directors has determined, in good faith, that a competing proposal is a superior proposal, subject to certain conditions;
	•		by Encompass, if (1) we have breached representations, warranties, covenants or other agreements which leads to a violation of applicable closing conditions and cannot be cured by February 28, 2011 or if curable, is not cured within 30 days of Encompass’ notice of intent to terminate, (2) our board of directors makes a change of recommendation, fails to recommend against a competing tender offer, enters into an acquisition agreement, or publicly announces an intention to take any of such actions, or (3) if any of certain specified customers terminate contracts with our company and its subsidiaries representing, in the aggregate, all or substantially all the revenue received by us from such customer for network origination, playout and master control services in the UK.

Termination Fees

          The Company must pay to Purchasers a termination fee of $4,530,000 in cash if any of the following occurs:

	•		a competing proposal is publicly announced, and, following such announcement, the Purchase Agreement is terminated (i) by us or Encompass because the closing of the Content Distribution transaction does not occur by February 28, 2011, (ii) by us or Encompass because the transaction proposal is not approved at the special meeting, or (iii) by Encompass because of our breach or failure to perform, and, in any such case, prior to, concurrently with or within twelve months after termination we enter into a definitive agreement with respect to any competing proposal;
	•		the Purchase Agreement is terminated by us due to the determination, in good faith, by our board of directors that a competing proposal is a superior proposal; or
	•		the Purchase Agreement is terminated by Encompass due to a change of recommendation effected by our board of directors.

Reverse Termination Fee

          If the conditions to Encompass’s obligations under the Purchase Agreement are satisfied, but either Encompass US or Encompass UK breaches its obligation to consummate the Content Distribution transaction pursuant to the Purchase Agreement, and we exercise our right to terminate the Purchase Agreement as a result of Encompass’s breach, Encompass US will be obligated to pay us a reverse termination fee of $9,680,000 (the Reverse Termination Fee), and such Reverse Termination Fee shall constitute our Company’s sole remedy for such breach.

Amendment

          The Purchase Agreement may not be amended except by an instrument in writing signed by all parties.

Waiver

          Any of the terms or conditions of the Purchase Agreement may be waived at any time by the Company or Encompass, but only by a writing signed by the party waiving such terms or conditions.

Specific Performance

          The Company and Encompass have agreed that (i) Encompass would suffer irreparable damage in the event any of the provisions of the Purchase Agreement were not performed by the Company in accordance with the terms

thereof and (ii) Encompass shall be entitled to specific performance of the terms of the Purchase Agreement in addition to any other remedies to which it may be entitled.

          The Company has expressly waived any right to specifically enforce the Purchase Agreement, and has agreed that its right to receive the Reverse Termination Fee as provided in the Purchase Agreement shall be the Company’s exclusive remedy in the event of any breach of the Purchase Agreement by Encompass prior to the Closing.

THE CREATIVE/MEDIA TRANSACTION

Deluxe

          Deluxe Entertainment Services Group Inc. (Deluxe US) is a wholly-owned subsidiary of MacAndrews & Forbes Holdings Inc. and Deluxe UK Holdings Limited (Deluxe UK and, together with Deluxe US, Deluxe) is a wholly owned subsidiary of Deluxe US. A leading provider of a broad range of entertainment industry services and technologies, Deluxe has an international client base comprising major motion picture studios and other owners and distributors of filmed entertainment, video and digital media content. Services include motion picture film processing, printing and distribution; digital intermediates; post production and subtitling services; titles design and digital visual effects; DVD compression, encoding and authoring; digital cinema services, digital asset management, digital distribution; and marketing fulfillment services. Laboratory and post production facilities are located in North America, Europe, and Australia. Deluxe also offers home entertainment services in North America, Europe and India.

		State of incorporation:		Delaware
		Principal Offices:		1377 North Serrano Avenue
				Hollywood, CA 90027

Creative/Media Transaction

          As previously disclosed, on December 31, 2010, we sold Creative Services and Media Services to Deluxe. The terms and conditions of this transaction were set forth in a purchase agreement dated November 24, 2010, between the Company and certain of its indirect wholly-owned subsidiaries, on the one hand, and Deluxe US and Deluxe UK, on the other hand. We refer to that purchase agreement as the Deluxe purchase agreement. We refer to Creative Services and Media Services, on a combined basis, as the Creative/Media business and we refer to the purchase and sale of the Creative/Media business to Deluxe pursuant to the Deluxe purchase agreement as the Creative/Media transaction.

          Prior to the closing of the Creative/Media transaction, we restructured certain of our subsidiaries and assets so that the Creative/Media business was owned and operated entirely by the entities purchased by Deluxe. Giving effect to such internal reorganization: (i) AMG owned the assets and operations of the Creative/Media business in the United States, (ii) AMGL owned the assets and operations of the Creative/Media business in the United Kingdom, and (iii) AMG and AMGL did not hold any assets or operations other than those included in the Creative/Media business.

          On December 31, 2010 our company and Deluxe consummated the Creative/Media transaction. At the closing of the Creative/Media transaction:

	•		Deluxe US purchased 100% of the outstanding ownership interests in AMG; and
	•		Deluxe UK purchased 100% of the outstanding shares of AMGL;

in each case for the portion of the purchase price allocable to such ownership interests or outstanding shares, as provided in the Deluxe purchase agreement.

Purchase Price

          At the closing of the Creative/Media transaction, our company received approximately $67.3 million in cash, after giving effect to a working capital adjustment of approximately $1.0 million, and Deluxe assumed certain net indebtedness of approximately $1.8 million. Pursuant to the Deluxe purchase agreement, 79% of the aggregate purchase price in the Creative/Media transaction was allocable to the ownership interests of AMG, and 21% of such aggregate purchase price was allocable to the shares of AMGL.

          Post-Closing Adjustment

          Two business days prior to the anticipated closing date, we provided Deluxe with a statement setting forth our good faith estimate of the Creative/Media purchase price, taking into account the working capital, net debt, and other purchase price adjustments described in the Deluxe purchase agreement. On the closing date for the Creative/Media transaction, Deluxe and its subsidiary paid us such estimated purchase price, in the aggregate, in cash. Following the closing of the Creative/Media transaction, the parties will determine the final purchase price for such transaction based on the actual net closing indebtedness, net working capital, and company transaction expenses of the Creative/Media business at the closing date of such transaction, as applicable. Any disputes concerning the final Purchase Price shall be resolved by binding arbitration before an independent nationally recognized accounting firm mutually agreed upon by the Company and Deluxe US. Promptly after such purchase price has been finally determined, Deluxe US shall pay to us the amount, if any, by which such final purchase price exceeds the estimated purchase price, or we shall pay to Deluxe US the amount, if any, by which such estimated purchase price exceeds such final purchase price.

Certain Covenants and Agreements

          Pursuant to the Deluxe purchase agreement, we have also agreed to certain covenants, including the following:

UK Defined Benefit Pension Plan

     The Company has agreed that, within one year after the closing of the Creative/Media transaction, two pension plans for which AMGL is a responsible party in the United Kingdom (which we refer to collectively as the UK DB Plans) shall be wound up or fully funded on a buyout basis. In that connection, the Company agreed to take all actions necessary to cause one of the UK DB Plans, which is currently accruing benefits for participants, to be closed to future accrual prior to the closing date, and to cause each Creative/Media Group Entity that is the principal employer under a UK DB Plan to be replaced as principal employer with AMC or a subsidiary of AMC other than the Creative/Media Group Entities, and to be released from liability thereunder, in each case with effect from the closing date. In connection with that undertaking, the Company currently expects that it will make additional capital contributions to the UK DB Plans in the aggregate amount of not less than $4.5 million, during 2011.

Restrictions on Competition

     The Company has also agreed for a period of three years after the closing of the Creative/Media transaction, subject to certain exceptions,

not to enter into a business that competes with the Creative/Media business or to solicit employees from Deluxe or its subsidiaries that operate the Creative/Media business.

Affiliate Transactions; Parent Release

     Prior to the closing date of the Creative/Media transaction, we terminated any liabilities and obligations between any of the entities operating the Creative/Media business, on the one hand, and us or our other subsidiaries, on the other hand. In addition, we have agreed to waive any claim against the entities operating the Creative/Media business and release such entities from any liabilities related to these claims.

Services Agreements

     In connection with the consummation of the Creative/Media transaction, the Company entered into services agreements with Deluxe pursuant to which the Company or its subsidiaries (including, in certain instances, the Content Distribution Group Entities) will provide certain transitional support services to Deluxe in its operation of the Creative/Media business. Similarly, Deluxe will provide certain transitional support services to the Company.

Indemnification; Survival of Indemnification Obligations

     Indemnification by AMC

          Subject to certain limitations set forth in the Deluxe purchase agreement, the Company will indemnify Deluxe and its affiliates and representatives against damages arising out of or resulting from (i) any breach of a representation or warranty made by the Company or any of its subsidiaries in the Deluxe purchase agreement or other transaction documents, (ii) any breach or failure by the Company or a subsidiary to perform any of its covenants or obligations in the Deluxe purchase agreement or other transaction agreements and (iii) any excluded liabilities or related third-party claims. In addition, the Deluxe Purchase Agreement provides for the Company to indemnify Deluxe and its affiliates and representatives after the closing of the Creative/Media Transaction from any taxes of the Creative/Media Group Entities and their affiliates for periods prior to the closing of the Creative/Media transaction, as wells as certain other tax-related obligations.

     Indemnification by Deluxe

          Subject to certain limitations set forth in the Deluxe purchase agreement, Deluxe, its subsidiary and the entities operating the Creative/Media business will, jointly and severally, indemnify the Company and its affiliates and representatives against damages arising out of or resulting from (i) any breach of a representation or warranty made by Deluxe in the Deluxe purchase agreement or other transaction agreements, (ii) any breach or failure by Deluxe to perform any of their covenants or obligations in the Deluxe purchase agreement or other transaction agreements and (iii) any related third-party claims brought against the Company or its subsidiaries arising from the operation of the Creative/Media business by Deluxe after the closing of the Creative/Media transaction.

     Limits on Indemnification

          The Deluxe purchase agreement provides that, subject to the exceptions described below, the aggregate liability of the Company for indemnification for damages arising out of or resulting from breaches of our representations or warranties, as well as certain covenants relating to the operation of the Creative/Media business between signing and closing, will not exceed $10,500,000. In addition, the Company will not be liable for indemnification for damages arising out of or resulting from these types of breaches of our representations or warranties unless and until the aggregate amount of such damages exceeds $1,000,000, and then only for the amount by which such damages exceed $1,000,000.

          Such limitations do not apply to (i) any breach or failure to be true of certain fundamental representations and warranties of the Company, including (x) the due organization, valid existence and good standing of the Company and the entities operating the Creative/Media Business, (y) our legal capacity and authority to perform our obligations under the Deluxe purchase agreement, including our ownership and ability to sell the entities involved, and (z) the absence of brokers’ fees, or (ii) breaches of certain specified covenants.

          The liability of Deluxe under the indemnification provisions set forth in the Deluxe purchase agreement are subject to comparable limitations as those in favor of the Company.

     Escrow

          As security for any potential indemnification obligations to under the Deluxe purchase agreement, $7,000,000 of the purchase price was deposited into escrow, pursuant to an escrow agreement entered into by the Company, Deluxe and Wells Fargo, N.A. on December 31, 2010. The escrow agreement provides that any amounts remaining in the escrow account on the second anniversary of the closing date shall be released to the Company, except to the extent of any open claims therefor. Under certain circumstances, if the Company and its subsidiaries desire to wind up or make certain distributions, we will first need to deposit into escrow an amount of cash equal to $3,500,000 or, in certain circumstances, the lesser amount that is necessary to satisfy all outstanding claims under the Deluxe Purchase Agreement.

ACQUISITION OF MONITRONICS

          On December 17, 2010, our company acquired 100% of the outstanding capital stock of Monitronics International, Inc. (Monitronics) through the merger of Mono Lake Merger Sub, Inc., a direct wholly owned subsidiary of our company established to consummate the merger, with and into Monitronics, with Monitronics as the surviving corporation in the merger.

          The terms of the merger are set forth in an agreement and plan of merger dated December 17, 2010 (which we refer to as the merger agreement), among our company, Mono Lake Merger Sub, Inc., Monitronics, and, for certain purposes only, ABRY Partners, LLC (the Shareholder Representative). At the time of the merger, ABRY Partners IV, L.P., a private equity investment fund whose general partner is an affiliate of the Shareholder Representative, held common stock of Monitronics representing a majority of the common stock of Monitronics outstanding or issuable upon the exercise of outstanding options and warrants. Pursuant to the merger agreement, the Shareholder Representative was designated as the agent for the holders of Monitronics’ common stock and options or warrants.

          The closing of the merger occurred simultaneously with the execution of the merger agreement. Concurrently with the merger agreement, the Company, Monitronics, and the Shareholder Representative also entered into an escrow agreement with Citibank, N.A. as escrow agent, to provide for the adjustment escrow and indemnity escrow described below.

Monitronics Merger Agreement

          The following is a summary of the material terms of the merger agreement. This summary does not purport to describe all the terms of the merger agreement and is qualified by reference to the complete text of the merger agreement, which is filed as an exhibit to our current report on Form 8-K dated December 17, 2010. We urge you to read the merger agreement carefully and in its entirety because it, and not this description, is the legal document that governs the transaction by which we acquired Monitronics.

          The following summary of the merger agreement is intended to provide you with information regarding the principal terms of the merger. The terms of the merger agreement (such as the representations and warranties) are intended to govern the contractual rights and relationships, and allocate risks, between the parties in relation to the merger. The merger agreement contains representations and warranties that our company, on the one hand, and Monitronics on the other hand, made to each other as of specific dates. The representations and warranties were negotiated between the parties with the principal purpose of setting forth their respective rights in connection with the indemnification provisions provided for in the merger agreement, and are subject to important limitations and qualifications set forth in the merger agreement, including contractual standards of materiality that may be different from that generally applicable under federal securities laws.

          In addition, the representations and warranties and other provisions are qualified by information in confidential disclosure schedules that our company and Monitronics have exchanged in connection with signing the merger agreement. While we do not believe that the disclosure schedules contain information that the securities laws require to be publicly disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties and other provisions set forth in the merger agreement. Accordingly, you should not rely on the representations and warranties and other provisions as characterizations of any actual state of facts, since they may be modified by the underlying disclosure schedules. Prior to the merger, Monitronics was a private company, and the disclosure schedule delivered by Monitronics contains certain non-public information, which may be material to an understanding of Monitronics and its business and financial results. Moreover, information concerning the subject matter of the representations and warranties of Monitronics may have changed since the date of the merger agreement, which may or may not be fully reflected in our public disclosures.

          This section is not intended to provide you with any other factual information about us or Monitronics. Such information can be found elsewhere in this proxy statement and in the other public filings we make with the SEC.

Merger Consideration

          The aggregate merger consideration payable by our company to the former stockholders, option holders and warrant holders of Monitronics pursuant to the merger was calculated based on:

	•		an adjusted enterprise value of $1,191,000,000,
	•		minus net indebtedness,
	•		minus unpaid company transaction expenses, and
	•		plus the difference between target working capital and closing working capital.

          Adjusted Enterprise Value. The purchase agreement provides for a nominal enterprise value of $1,255,000,000 including all outstanding indebtedness of Monitronics, which includes for this purpose the net breakage costs under certain derivative arrangements entered into by Monitronics to fix the effective interest rate under its existing structured financing, which we refer to as the swap breakage costs. The swap breakage costs represent an estimate of the cost that Monitronics would incur to effectively terminate such derivative arrangements as of the closing date, and are reflected on Monitronics’s closing balance sheet. However, Monitronics is not required to terminate such derivative arrangements, and if Monitronics continues to make fixed interest payments in accordance with such derivative arrangements for the remainder of their stated terms, the swap breakage costs would be zero on April 15, 2012, subject to a floor that expires in 2014. The amount of the swap breakage costs also varies based on prevailing interest rates and other market factors, and could be greater than, or less than, the amount of such costs on the closing date, if Monitronics should at any point in the future determine to terminate such derivative arrangements. As part of its negotiations with Monitronics in connection with the merger, our company agreed to fix the amount of the swap breakage costs at $64,000,000 for purposes of calculating net merger consideration under the merger agreement. This term was implemented by agreeing (a) to increase the nominal enterprise value by the amount, if any, that the actual swap breakage costs were greater than $64,000,000, or to decrease the nominal enterprise value by any amount that the actual swap breakage costs were less than $64,000,000, and (b) to subtract the actual swap breakage costs from such nominal enterprise value (in addition to the other adjustments described below) in the calculation of net merger consideration. The net effect of these provisions was to fix the enterprise value of Monitronics, exclusive of such derivative arrangements, but including the assumption of all other indebtedness of Monitronics, at $1,191,000,000. For purposes of this discussion, we refer to such amount as the adjusted enterprise value of Monitronics, although such term is not used in the merger agreement.

          Net Indebtedness. For purposes of calculating the merger consideration as described above, the net indebtedness of Monitronics equals (i) long-term debt of Monitronics and its subsidiaries on the closing date, in the aggregate amount of $844,200,000, (ii) minus $66,214,000 in cash of Monitronics and its subsidiaries on the closing date, which includes restricted cash. Based on such calculation, net indebtedness of Monitronics was estimated to be $777,986,000 on the closing date.

          Unpaid Company Transaction Expenses. The merger agreement defines unpaid company transaction expenses as all expenses incurred on or before the closing date and payable by Monitronics or any of its subsidiaries in connection with the transaction, to the extent unpaid as of the closing date, other than compensation expense relating to outstanding stock options, and other than certain expenses relating to the preparation of Monitronics financial information for this proxy statement, and certain expenses relating to our company’s financing in connection with the merger. At the closing, the unpaid company transaction expenses were estimated to be $14,072,000.

          Closing Working Capital and Target Working Capital. The merger agreement generally defines closing working capital as the aggregate amount of current assets of Monitronics and its subsidiaries minus the aggregate amount of current liabilities of Monitronics and its subsidiaries, in each case as of the closing date, whether such result is a positive number or a negative number. The merger agreement defines target working capital as negative $16,579,000. At the closing, the difference between target working capital and closing working capital was estimated to be $127,000.

          Estimated Merger Consideration, Escrowed Amounts. In connection with the closing, Monitronics provided the Company with a statement setting forth its good faith estimate of the merger consideration, taking into account the terms described above. Based on such calculation, the aggregate amount paid in cash by the Company at the closing was $413,141,000, of which $14,072,000 comprised transaction expenses incurred by Monitronics and payable by the Company pursuant to the merger agreement and $399,069,000 comprised merger consideration payable to the stockholders, option holders and warrant holders of Monitronics in the merger. Pursuant to the merger agreement, on the closing date, the Company paid the estimated merger consideration, in cash, to the Shareholder Representative, as paying agent for the holders of Monitronics common stock, options and warrants, less:

	•		$3,000,000 from the aggregate estimated merger consideration, which was deposited with Citibank, N.A., as escrow agent pursuant to the escrow agreement, as an adjustment escrow to be available to satisfy any amounts due to our company as set forth below under “—Post-Closing Adjustment”; and

	•		$25,000,000 from the aggregate estimated merger consideration, which was deposited with Citibank, N.A., as escrow agent pursuant to the escrow agreement, as an indemnity escrow to be available to satisfy any obligation of Monitronics as set forth below under “Indemnification—Indemnification by Monitronics”.

The following table shows the calculation of the merger consideration and total cash consideration paid by the Company at the closing, in connection with its acquisition of Monitronics:

Description		Amount
Adjusted Enterprise Value		$	1,191,000,000
- Net Indebtedness		$	777,986,000
- Unpaid Company Transaction Expenses		$	14,072,000
+ Closing Working Capital minus Target Working Capital		$	127,000
Estimated Merger Consideration		$	399,069,000
+Unpaid Company Transaction Expenses		$	14,072,000
Total cash consideration paid by the Company		$	413,141,000

          Post-Closing Adjustment. Following the closing, the parties will determine the final merger consideration based on the actual adjusted net indebtedness, closing working capital, and unpaid company transaction expenses of Monitronics at the closing date of the transaction, as applicable. Any disputes concerning the final merger consideration shall be resolved by binding arbitration adjudicated by Deloitte LLP. Promptly after such merger consideration has been finally determined, if the actual merger consideration is greater than the merger consideration estimated by Monitronics at the closing, our company will pay such deficiency in cash to the Shareholder Representative, as paying agent for the former holders of Monitronics common stock, options and warrants, and if the actual merger consideration is less than the merger consideration estimated by Monitronics at the closing, the amount of such difference shall be repaid to our company in cash from the adjustment escrow (or, if the adjustment escrow is insufficient, from the indemnity escrow).

          Source of Funds. The aggregate consideration paid in cash by the Company at the closing was funded from cash on hand, proceeds from the sale of marketable securities, and $105,000,000 in borrowings under a new $175,000,000 credit facility. See, “Acquisition Financing,” below.

          Treatment of Monitronics Common Stock and Common Stock Equivalents

          Pursuant to the merger agreement, at closing:

	•		each share of Monitronics common stock that was outstanding immediately prior to the effective time of the merger was converted into the right to receive the per share cash merger consideration (calculated on a fully diluted basis, assuming the exercise in full of all options and warrants for Monitronics common stock outstanding immediately prior to the effective time of the merger and the receipt by Monitronics of the aggregate exercise price of such options and warrants); and
	•		each Monitronics option or warrant that was outstanding immediately prior to the effective time of the merger was converted into the right to receive an amount in cash equal to the difference between (i) the aggregate merger consideration that would be payable with respect to the aggregate number of shares of common stock underlying such option or warrant as though such shares were issued and outstanding immediately prior to the effective time of the merger, and (ii) the aggregate exercise price applicable under such option or warrant;

in each case subject to the indemnification and escrow provisions set forth in the merger agreement, and any deductions by the Shareholder Representative in reimbursement of its costs incurred as agent of the holders under the merger agreement, which may have the effect of reducing the amount payable per share of Monitronics common stock or option or warrant therefor.

          Representations and Warranties

          The merger agreement contains a number of representations and warranties made by Monitronics. Such representations and warranties are subject to certain qualifications and exceptions set forth in the merger agreement or in the confidential disclosure schedules provided by Monitronics to the Company pursuant to the merger agreement, and relate to, among other things, the following:

	•		due organization, valid existence, good standing and other corporate matters;
	•		capitalization and corporate structure of Monitronics;
	•		authorization, execution, delivery and enforceability of the merger agreement and the transactions contemplated thereby;
	•		conflicts or violations under organizational documents, contracts or law;
	•		financial statements and indebtedness, including the absence of certain undisclosed liabilities;
	•		the absence of certain changes or events;
	•		pending litigations or proceedings against Monitronics;
	•		permits and other approvals from governmental entities and compliance with applicable law;
	•		taxes;
	•		certain intellectual property matters;
	•		material contracts, leases, financial instruments and other agreements;
	•		matters relating to employee benefit plans;
	•		leased and owned real property;
	•		employees and certain employee matters;
	•		certain environmental matters;
	•		material insurance policies;
	•		transactions with affiliates of Monitronics;
	•		certain matters relating to alarm monitoring contract dealers and customers;
	•		brokerage or finder’s fees with respect to the transaction;
	•		certain matters relating to security systems and monitoring centers;
	•		the absence of violations under certain laws relating to foreign corrupt practices and international trade sanctions; and
	•		the conduct of Monitronics on the closing date of the merger.

          The merger agreement also contains various representations and warranties made by the Company and its subsidiary. Such representations and warranties are subject to certain qualifications and exceptions set forth in the merger agreement, and relate to, among other things, the following:

	•		due organization, valid existence, good standing and other corporate matters;
	•		authorization, execution, delivery and enforceability of the merger agreement and the transactions contemplated thereby;
	•		conflicts or violations under organizational documents, contracts or law;
	•		the absence of litigation and other proceedings;
	•		the absence of brokerage of finder’s fees with respect to the transaction;
	•		the solvency of the Company, Merger Sub and Monitronics as the surviving corporation after giving effect to the merger and other transactions contemplated by the merger agreement; and
	•		matters relating to the funding of the transactions contemplated by the merger agreement.

          Indemnification

          Indemnification by Monitronics. Subject to certain limitations and exceptions set forth in the merger agreement, the Company and the surviving corporation will be indemnified (but only to the extent of funds on deposit in the indemnity escrow and amounts available under an indemnity policy, as defined below) against damages arising out of or resulting from (i) any breach of a representation or warranty made by Monitronics in the merger agreement or (ii) any breach by the Shareholder Representative of any covenant set forth in the merger agreement or any unpaid company transaction expense to the extent it is not actually reflected in the amount of unpaid company transaction expenses used to calculate the merger consideration. The representations and warranties of Monitronics will remain in full force and effect until August 31, 2012.

          Indemnification by the Company. Subject to certain limitations and exceptions set forth in the merger agreement, the former holders of Monitronics common stock and common stock equivalents and the Shareholder Representative will be indemnified against any damages arising out of or resulting from (i) any breach of a representation or warranty made by the Company or our subsidiary in the merger agreement or (ii) any breach by the Company, our subsidiary or, if after the effective time, the surviving corporation, of any of their covenants in the merger agreement. The representations and warranties of the Company and Merger Sub will remain in full force and effect until August 31, 2012.

          Indemnity Escrow and Indemnity Policy. As security for any potential indemnification obligations owed to the Company and the surviving corporation under the merger agreement, at the closing of the transaction, the Company deposited $25,000,000 of the merger consideration into the indemnity escrow pursuant to the escrow agreement. Although the indemnification provisions of the merger agreement extend through August 31, 2012, the

indemnity escrow will be released on December 31, 2011 (which we refer to as the escrow release date), except to the extent of any open claims therefor. From and after the earlier of (a) any depletion of the indemnity escrow and (b) the escrow release date, any claims by our company for indemnification under the merger agreement will be limited to claims for breach of representation and warranty only and may be brought only against certain insurance policies obtained by the Shareholder Representative for the benefit of our company for such purpose from certain insurance carriers, in the aggregate amount of $50,000,000, which insurance policies will remain in effect until August 31, 2012. We refer to such representation and warranty insurance policies collectively as the indemnity policy. Pursuant to the merger agreement, the premiums and certain other costs relating to the indemnity policy were paid in full by Monitronics prior to closing.

          Limits on Indemnification. The merger agreement provides that, subject to the exceptions described below, the aggregate liability for which our company and the surviving corporation may be indemnified for damages arising out of or resulting from breaches of representations or warranties and certain covenants will be limited to the indemnity escrow and the amount available under the indemnity policy. Indemnifiable claims will be applied first to the indemnity escrow and then, following the earlier of the escrow release date and the indemnity escrow’s depletion, against the indemnity policy. In addition, Monitronics will not be liable for indemnification for damages arising out of or resulting from breaches of its representations and warranties unless and until the aggregate amount of such damages exceeds a $10,000,000 “basket”, and then only for the amount by which such damages exceed such amount. This limitation does not apply to any breach of covenant by Monitronics or any breach of its representation and warranty relating to brokerage and similar fees and commissions in connection with the merger or any related transaction, or any breach of the representation and warranty of Monitronics relating to the conduct of Monitronics on the closing date.

The Monitronics Business

          Monitronics International, Inc. (Monitronics) is the fourth largest alarm monitoring company in the United States, with over 665,000 subscribers under contract. With subscribers in all 50 states, the District of Columbia, Puerto Rico, and Canada, Monitronics provides a wide range of security alarm services, monitoring signals from burglaries, fires and other events, as well as providing customer service and technical support. Monitronics’s service offerings include hands-free two-way interactive voice communication with the monitoring center, a cellular back-up option, and an interactive service option which allows a customer to control their security system remotely using a computer or smart phone. Monitronics was incorporated in 1994 and is headquartered in Dallas, Texas.

          Unlike many of its national competitors, Monitronics outsources the sales, installation and field service functions to its dealers. By outsourcing the low margin, high fixed-cost elements of its business to a large network of independent service providers, Monitronics is able to allocate capital to growing its revenue-generating account base rather than to local offices or depreciating hard assets. Monitronics believes that it is the only alarm-monitoring company of national scale that operates exclusively through a network of independent dealers.

          During the 12 months ended September 30, 2010, Monitronics purchased alarm monitoring contracts from approximately 450 dealers. Monitronics generally enters into alarm monitoring purchase agreements with dealers only after a thorough review of the dealer’s qualifications, licensing and financial situation. Once a dealer has qualified, Monitronics generally obtains rights of first refusal to purchase all accounts sold by that dealer for a period of three years.

          The primary steps in creating an account are as follows:

	1.		Dealer sells an alarm system to a homeowner or small business.
	2.		Dealer installs the alarm system, which is monitored by Monitronics central monitoring center, trains the customer on its use, and receives a signed three to five year contract for monitoring services.
	3.		Dealer presents the account to Monitronics for purchase.
	4.		Monitronics performs diligence on the alarm monitoring account to validate quality. This process includes several due diligence tests including a credit score analysis and telephonic confirmation with a significant number of subscribers confirming satisfaction with their installation and security system. Because purchase criteria are agreed upon with each dealer in advance, Monitronics is able to acquire most accounts submitted to it for purchase.
	5.		Monitronics acquires the customer contract at a formula-based price.

	6.		Customer becomes a Monitronics account.
	7.		All future billing and customer service is conducted through Monitronics.

          Monitronics generally pays its dealers a purchase price for each new customer account based on a multiple of the account’s monthly recurring revenue. The terms on which Monitronics acquires customer accounts from dealers are provided for in the dealer contract. The dealer contract generally provides that, if a customer account acquired by Monitronics is terminated within the first 12 months, the dealer must replace the account or refund the purchase price paid by Monitronics. To secure the dealer’s obligation, Monitronics holds back a percentage of the purchase price for a 12 month period. Following the initial three-to-five year contract period, subscriber monitoring contracts are subject to automatic renewal on a month-to-month basis, until terminated.

          Monitronics believes that this process, which includes both clearly defined customer account standards and a consistently applied due diligence process, contributes significantly to the high quality of its subscriber base. For each of its last five fiscal years, the average credit score of accounts purchased by Monitronics, was in excess of 700 on the FICO scale.

          Approximately 93% of Monitronics subscribers are residential homeowners and the remainder are small commercial accounts. Monitronics believes that its primary focus on residential homeowners helps minimize churn, because homeowners relocate less frequently than renters and have higher average credit scores.

          Monitronics provides monitoring services as well as billing and 24-hour telephone support through its central monitoring station, located in Dallas, Texas. This facility is UL listed and has earned the Central Station Alarm Association’s (CSAA) prestigious Five Diamond Certification. According to the CSAA, less than 4% of all central monitoring stations in the U.S. have attained Five Diamond Certified status. Monitronics also has a back-up facility located in McKinney, Texas that is capable of supporting monitoring, billing and customer service operations in the event of a disruption at its primary monitoring center. A call center in Mexico provides telephone support for Spanish-speaking subscribers.

          Monitronics’s telephone systems utilize high-capacity, high-quality, digital circuits backed up by conventional telephone lines. When an alarm signal is received at the monitoring facility, it is routed to an operator. At the same time, information concerning the subscriber whose alarm has been activated and the nature and location of the alarm signal are delivered to the operator’s computer terminal. The operator is then responsible for following standard procedures to contact the subscriber or take other appropriate action, including, if the situation requires, contacting local emergency service providers. Local emergency service providers are usually contacted if Monitronics is unable to contact a subscriber, if the monitoring station receives the wrong password, if the subscriber’s specified contact telephone line is busy or if Monitronics has reason to suspect an emergency situation at a subscriber’s home. Monitronics never dispatches its own personnel to the subscriber’s premises.

          Monitronics seeks to increase subscriber satisfaction and retention by carefully managing customer and technical service. The customer service center handles all general inquiries from subscribers, including those related to subscriber information changes, basic alarm troubleshooting, alarm verification, technical service requests and requests to enhance existing services. Monitronics has a proprietary centralized information system that enables it to satisfy almost 90% of subscriber technical inquiries over the telephone, without dispatching a service technician. If the customer requires field service, Monitronics relies on its nationwide network of over 500 service dealers to provide such service on a time and materials basis.

          Facilities and Personnel. Monitronics leases approximately 120,000 square feet in Dallas, Texas to house its executive offices, monitoring center, sales and marketing and data retention functions, as well as approximately 13,000 square feet for the McKinney, Texas back-up monitoring facility. Monitronics employs approximately 700 people, substantially all of whom are based in Texas.

          Intellectual Property. The Company has a registered service mark for the Monitronics name and a service mark for the Monitronics logo. It owns certain proprietary software applications that are used to provide services to its dealers and subscribers. Monitronics does not hold any patents or other intellectual property rights on its proprietary software applications.

          Legal. In the ordinary course of business, Monitronics is subject to various legal proceedings and claims, including product liability matters, claims brought by or on behalf of subscribers (and by insurance companies pursuant to subrogation rights) based on alleged failures relating to monitoring services, patent infringement claims, employment disputes, disputes on agreements and other commercial disputes. Monitronics does not expect the outcome of these proceedings or claims, individually or in the aggregate, to have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

          Regulatory. Monitronics’ operations are subject to a variety of laws, regulations and licensing requirements of federal, state and local authorities. In certain jurisdictions, the Company is required to obtain licenses or permits, to comply with standards governing employee selection and training and to meet certain standards in the conduct of its business. Many jurisdictions also require certain of their employees to obtain licenses or permits. The security industry is also subject to requirements imposed by various insurance, approval, listing and standards organizations. Depending upon the type of subscriber served, the type of security service provided and the requirements of the applicable local governmental jurisdiction, adherence to the requirements and standards of such organizations is mandatory in some instances and voluntary in others.

Acquisition Financing

          On December 17, 2010, Monitronics entered into a credit agreement (the credit facility) with the lenders party thereto and Bank of America, N.A., as administrative agent. The credit facility provides a $60,000,000 term loan and a $115,000,000 revolving credit facility. The interest rate under the term loan is:

	•		LIBOR plus 3.50% per annum through June 30, 2011,
	•		LIBOR plus 4.00% per annum from July 1, 2011 through December 31, 2011, and
	•		LIBOR plus 4.50% per annum thereafter.

          The interest rate under the revolving credit facility is LIBOR plus 4.00% per annum. There is a LIBOR floor of 1.50% per annum, and a commitment fee of 0.50% per annum on unused portions of the revolving credit facility. The term loan matures on June 30, 2012, and requires principal installments of $20,000,000 on December 31, 2011, and March 31, 2012. The revolving credit facility matures on December 17, 2013.

          The terms of the credit facility include customary representations and warranties, customary mandatory prepayments, customary affirmative and negative covenants and customary events of default. In addition, Monitronics must maintain a total leverage ratio of no more than 2.75 to 1 through September 30, 2011, and no more than 2.50 to 1 thereafter, and a fixed charge coverage ratio of not less than 2.50 to 1.

          Upon any refinancing of the notes issued by Monitronics Funding LP, a subsidiary of Monitronics, in connection with Monitronics’s existing structured financing, Monitronics must prepay the term loan under the credit facility. If such refinancing does not occur by June 30, 2012, Monitronics must maintain a ratio of total debt to monthly recurring revenue of no more than 25 to 1 in place of the total leverage ratio test, until such refinancing occurs.

          At any time after the occurrence of an event of default under the credit facility, the lenders may, among other remedies, declare any amounts outstanding under the credit facility immediately due and payable and terminate any commitment to make further loans under the credit facility. The obligations under the credit facility are secured by a security interest on substantially all the assets of Monitronics and its wholly owned subsidiary, Monitronics Canada, Inc., as well as a pledge by our company of all outstanding stock of Monitronics. Our company has guaranteed payment of the term loan up to the first $30,000,000 of obligations thereunder.

          On December 17, 2010, Monitronics borrowed the full amount of the term loan and $45,000,000 under the revolving credit facility, for total initial borrowings under the credit facility of $105,000,000. The proceeds of such loans, after repayment of approximately $5.0 million outstanding under a previously existing credit facility, and payment of certain fees and expenses relating to the credit facility, were used to fund a portion of the aggregate merger consideration payable by our company in connection with its acquisition of Monitronics on December 17, 2010.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

          The following table sets forth information concerning shares of our common stock beneficially owned by each person or entity (excluding any of our directors and executive officers) known by us to own more than five percent of the outstanding shares of any series of our common stock. All of such information is based on publicly available filings.

          The security ownership information is given as of November 30, 2010, and, in the case of percentage ownership information, is based upon 13,556,343 shares of our Series A common stock and 733,599 shares of our Series B common stock, in each case, outstanding on that date. The percentage voting power is presented on an aggregate basis for all series of common stock.

Name and Address		Title of				Amount and Nature of				Percent of				Voting
of Beneficial Owner		Class				Beneficial Ownership				Class				Power
Robert R. Bennett		Series A					17,980	(1)(2)(3)			*				3.73	%
c/o Liberty Media Corporation		Series B					76,212	(1)(2)			10.39	%
12300 Liberty Boulevard Englewood, CO 80112
BlackRock, Inc.		Series A					1,184,307	(4)			8.74	%			5.67	%
40 East 52nd Street New York, NY 10022
FMR LLC		Series A					857,185	(5)			6.32	%			4.10	%
82 Devonshire Street Boston, MA 02109
Mario J. Gabelli		Series A					1,331,356	(6)			9.82	%			6.37	%
c/o GAMCO Investors, Inc. One Corporate Center Rye, NY 10580
T. Rowe Price Associates, Inc.		Series A					873,977	(7)			6.45	%			4.18	%
100 E. Pratt Street Baltimore, MD 21202

Security Ownership of Management

          The following table sets forth information with respect to the ownership by each of our directors, each of our named executive officers (William R. Fitzgerald, William E. Niles, George C. Platisa, and John Orr), and by all of our directors and executive officers as a group, of shares of Series A common stock and Series B common stock. The security ownership information is given as of November 30, 2010, and, in the case of percentage ownership information, is based upon 13,556,343 shares of Series A common stock and 733,599 shares of Series B common stock, in each case, outstanding on that date. Such outstanding share amounts do not include shares of our common stock that may be issued upon the exercise of stock options, including stock options disclosed in the table below. The percentage voting power is presented in the table below on an aggregate basis for all series of common stock.

          Shares of restricted stock that have been granted pursuant to our equity incentive plans are included in the outstanding share numbers provided throughout this proxy statement. Shares of common stock issuable upon exercise or conversion of options, warrants and convertible securities that, as of November 30, 2010, were exercisable or convertible on such date or within 60 days thereafter, are deemed to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of the person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. For purposes of the following presentation, any beneficial ownership of shares of our Series B common stock, though convertible on a one-for-one basis into shares of our Series A common stock, is reported as beneficial ownership of our Series B common stock only, and not as beneficial ownership of our Series A common stock. So far as is known to us, the persons indicated below have sole voting power with respect to the shares indicated as owned by them, except as otherwise stated in the notes to the table.

Title of

Amount and Nature of

Percent of

Voting

Name of Beneficial Owner

Class

Beneficial Ownership

Class

Power

William R. Fitzgerald

Series A

240,469

1.75

%

*

Chairman of the Board and

Series B

—

—

Chief Executive Officer

Philip J. Holthouse

Series A

16,227

*

*

Director

Series B

—

—

John C. Malone

Series A

150,617

1.11

%

30.33

%

Director

Series B

618,525

84.31

%

Brian C. Mulligan

Series A

16,207

*

*

Director

Series B

—

—

William E. Niles

Series A

15,593

*

*

Executive Vice President,

Series B

—

—

General Counsel and Secretary

John A. Orr

Series A

84,451

*

*

Senior Vice President

Series B

—

—

George C. Platisa

Series A

15,593

*

*

Executive Vice President and

Series B

—

—

Chief Financial Officer

Michael J. Pohl

Series A

16,207

*

*

Director

Series B

—

—

Carl E. Vogel

Series A

3,830

*

*

Director

Series B

—

—

All directors and executive officers as a group (9 persons)

Series A

559,194

4.12

%

32.28

%

Series B

618,525

84.31

%

          (1) Includes, as applicable, the following restricted shares of our Series A common stock which remain subject to vesting as of November 30, 2010:

Name		Restricted Shares
William R. Fitzgerald			47,271
Philip J. Holthouse			2,016
Brian C. Mulligan			2,016
William E. Niles			444
John A. Orr			17,271
George C. Platisa			444
Michael J. Pohl			2,016
Carl E. Vogel			1,915

          (2) Includes, as applicable, beneficial ownership of the following shares of our Series A common stock that may be acquired upon exercise of stock options that are exercisable within 60 days of November 30, 2010:

Name		Option Shares
William R. Fitzgerald			156,174
Philip J. Holthouse			11,030
Brian C. Mulligan			11,030
William E. Niles			13,820
John A. Orr			54,807
George C. Platisa			13,820
Michael J. Pohl			11,030

          (3) Includes 20 shares of our Series A common stock owned by Mr. Holthouse jointly with his wife.

          (4) Includes 26,833 shares of our Series A common stock and 17,046 shares of our Series B common stock held by Mr. Malone’s wife, Leslie Malone, as to which shares Mr. Malone has disclaimed beneficial ownership.

          (5) Includes 16 and 55,317 shares of our Series A common stock held by two trusts with respect to which Mr. Malone is the sole trustee and, with his wife, retains a unitrust interest in the trust. Also includes 2,570 shares of our Series A common stock and 9,178 shares of our Series B common stock held by two trusts which are managed by an independent trustee, of which the beneficiaries are Mr. Malone’s adult children and in which Mr. Malone has no pecuniary interest. Mr. Malone retains the right to substitute assets held by the trusts but has disclaimed beneficial ownership of the shares held by the trusts for the benefit of his children.

          (6) Includes 1 share of our Series A common stock held by an IRA account.

Changes in Control

     We know of no arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of our company.

ADDITIONAL INFORMATION

Delivery to Stockholders Sharing an Address

          The SEC has adopted rules that permit companies and intermediaries (such as brokers) to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, known as “householding,” potentially means extra convenience for stockholders and cost savings for companies. This year, a number of brokers with customers who are our stockholders will be “householding” our proxy materials unless contrary instructions have been received from the customers. We will promptly deliver, upon oral or written request, a separate copy of the proxy statement to any stockholder sharing an address to which only one copy was mailed. Requests for additional copies should be directed to Ascent Media Corporation, Investor Relations Department, 12300 Liberty Boulevard, Englewood, Colorado 80112 (telephone number (720) 875-5622).

          Once a stockholder has received notice from his or her broker that the broker will be “householding” communications to the stockholder’s address, “householding” will continue until the stockholder is notified otherwise or until the stockholder revokes his or her consent. If, at any time, a stockholder no longer wishes to participate in “householding” and would prefer to receive separate copies of the proxy statement, the stockholder should so notify his or her broker. In addition, any stockholder who currently receives multiple copies of the proxy statement at his or her address and would like to request “householding” of communications in the future should contact his or her broker. If shares are registered in the stockholder’s name, the stockholder should contact our Investor Relations Department, at Ascent Media Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor Relations (telephone number (720) 875-5622) to make these requests.

Shareholder Proposals

          This proxy statement relates to a Special Meeting of stockholders which will take place on February 24, 2011. We currently expect that our annual meeting of stockholders for the calendar year 2011 will be held during May or June of 2011. In order to be eligible for inclusion in the proxy materials for the 2011 annual meeting, any stockholder proposal must have been submitted in writing to our Corporate Secretary and received at our executive offices at 12300 Liberty Boulevard, Englewood, Colorado 80112, on or before the close of business on January 28, 2011 unless a later date is determined and announced in connection with the actual scheduling of the annual meeting. To be considered for presentation at the 2011 annual meeting, any stockholder proposal must have been received at our executive offices at the foregoing address on or before the close of business on May 10, 2011 or such later date as may be determined and announced in connection with the actual scheduling of the annual meeting.

          All stockholder proposals for inclusion in our proxy materials will be subject to the requirements of the proxy rules adopted under the Exchange Act and, as with any stockholder (regardless of whether it is included in our proxy materials), our charter and bylaws and Delaware law.

Where You Can Find Additional Information

          Our Company is subject to the information and reporting requirements of the Exchange Act. In accordance with the Exchange Act, we file periodic reports and other information with the SEC. You may read and copy any document that we file with the SEC at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. You may also inspect such filings on the Internet website maintained by the SEC at www.sec.gov. Additional information can also be found on our website at www.ascentmedia.com. (Information contained on any website referenced in this proxy statement is not incorporated by reference in this proxy statement.) In addition, copies of our Annual Report on Form 10-K for the year ended December 31, 2009, or any of the exhibits listed therein, or copies of documents filed by our Company with the SEC are also available by contacting us by writing or telephoning the office of Investor Relations:

Ascent Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Telephone: (720) 875-5622

          The Securities and Exchange Commission allows us to “incorporate by reference” information into this document, which means that we can disclose important information about the Company to you by referring you to other documents. The information incorporated by reference is an important part of this proxy statement, and is deemed to be part of this document except for any information superseded by this document or any other document incorporated by reference into this document. Documents incorporated by reference herein will be made available to you, at no cost, upon your oral or written request to the Investor Relations office. Any statement, including financial statements, contained in our Annual Report on Form 10-K for the year ended December 31, 2009 (the 2009 Form 10-K) shall be deemed to be modified or superseded to the extent that a statement, including financial statements, contained in this proxy statement or in any other later incorporated document modifies or supersedes that statement. During the third quarter of 2010, we shut down our Global Media Exchange (GMX) business, which had been included in our Content Services group. We filed as exhibits to our Current Report on Form 8-K, filed on December 7, 2010 (the Reclassification Form 8-K), selected financial data, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and consolidated financial statements and notes thereto for each of the two years in the period ended December 31, 2009, which reflect the reclassification of GMX from continuing operations to discontinued operations. The information in the Reclassification Form 8-K, including the reclassified financial statements and notes, supersedes the same information in the 2009 Form 10-K. Anything contained herein to the contrary notwithstanding, the financial statements of the Company for the fiscal year ended December 31, 2007, contained in the 2009 Form 10-K, are not incorporated by reference into this proxy statement.