MOVIE GALLERY ANNOUNCES AMENDMENT
TO SENIOR CREDIT FACILITY

DOTHAN, Ala., March 16, 2006 -- Movie Gallery, Inc. (NASDAQ: MOVI) today
announced that it has entered into a definitive amendment to its senior
credit facility.  Pursuant to the terms of the amendment, among other
things, the financial covenants with which the Company must comply have
been relaxed for the next four fiscal quarters.  In addition, interest
rate terms have been increased and certain mandatory prepayment
provisions have been modified.  Furthermore, the Company's ability to
incur indebtedness, pay dividends, redeem its capital stock, make
capital expenditures, make acquisitions, and other covenants have been
made more restrictive.

"We are pleased to have reached an agreement with our bank lenders,"
said Joe Malugen, Chairman, President and Chief Executive Officer of
Movie Gallery.  "Movie Gallery continued to generate positive cash flow
during 2005 and finished the year with a solid liquidity position of
approximately $135.2 million in cash and cash equivalents.  With a
successful amendment to our senior credit facility, we can now focus on
implementing initiatives to drive our top-line performance and further
improve our operating efficiencies.  As part of these efforts, we will
aggressively right size the Company's store foot-print, close
unprofitable stores, divest non-core assets, and continue the
consolidation of our back office support center functions.  We expect
these initiatives will help offset the continued softness that we are
seeing in the box-office release schedule."

Because of delays associated with the amendment process and in
completing the first fiscal year-end audit since the Company acquired
Hollywood Entertainment Corporation, Movie Gallery does not expect to
file its annual report on Form 10-K by the March 17, 2006 deadline.
Movie Gallery's normal year-end audit is in progress, and the Company
expects to report its fourth quarter and full year results and file its
form 10-K on or before March 31, 2006.

About Movie Gallery

Movie Gallery is the second largest North American video rental Company
with approximately 4,800 stores located in all 50 U.S. states, Canada
and Mexico. Since the Company's initial public offering in August 1994,
Movie Gallery has grown from 97 stores to its present size through
acquisitions and new store openings.

Forward-Looking Statements

To take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, you are hereby cautioned that
this release contains forward-looking statements, including descriptions
of the expected impact of the amendments to the Company's senior credit
facility, that are based upon the Company's current intent, estimates,
expectations and projections and involve a number of risks and
uncertainties. Various factors exist which may cause results to differ
from these expectations. These risks and uncertainties include, but are
not limited to, the risk factors that are discussed from time to time in
the Company's SEC reports, including, but not limited to, the annual
report on Form 10-K for the fiscal year ended January 2, 2005. In
addition to the potential effect of these ongoing factors, the Company's
operations and financial performance may be adversely effected if, among
other factors; (i) same-store revenues are less than projected; (ii) the
Company is unable to comply with the revised financial covenants
contained in its senior credit facility; (iii) the Company's operational
improvement program described above fails to generate anticipated cost
reductions; (iv) the availability of new movie releases priced for sale
negatively impacts the consumers' desire to rent movies; (v) unforeseen
issues with the continued integration of the Hollywood Entertainment
business; (vi) the Company's actual expenses or liquidity requirements
differ from estimates and expectations; (vii) consumer demand for movies
and games is less than expected; (viii) the availability of movies and
games is less than expected; or (ix) competitive pressures are greater
than anticipated. The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.

Contacts
Financial: Thomas D. Johnson, Jr., Movie Gallery, Inc., 503-570-1950
Media: Andrew B. Siegel of Joele Frank, Wilkinson Brimmer Katcher, 212-
355-4449 ext. 127