UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-QSB

|ý                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended March 31, 2005                
|OR                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission File No. 000-17436

CKX, INC.(Exact name of Registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization)                              |  | 27-0118168(I.R.S. Employer Identification Number)
|--------------------------------------------------------------------------------------------------- |  | -------------------------------------------------
|650 Madison Avenue
New York, New York 10022(Address of Principal Executive Offices and Zip Code)   
|Registrant's Telephone Number, Including Area Code:(212) 838-3100                                  
|Securities Registered Pursuant to Section 12(b) of the Act:None                                    
|Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, Par Value $0.01 Per Share

Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

As of May 16, 2005 there were 68,444,195 shares of the registrant's common stock outstanding.

Transitional
Small Business Disclosure Format (check one) Yes o    No ý



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Table of Contents

Part I    Financial InformationItem 1.

Financial Statements

2Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

26Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36Item 4.

Controls and Procedures

37Part II    Other InformationItem 4.

Submission of Matters to a Vote of Security Holders

38Item 5.

Other Information

39Item 6.

Exhibits and Reports on Form 8-K

39


i

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Part 1.    FINANCIAL INFORMATIONItem 1.

Financial StatementsCondensed Consolidated Balance Sheets at March 31, 2005, December 31, 2004 and December 31, 2004 (Predecessor)

2Condensed Consolidated Statements of Operations for the three months ended March 31, 2005 and 2004, the period January 1, 2005 to February 7, 2005 (Predecessor) and the three months ended March 31,
2004 (Predecessor)

3Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2005 and 2004, the period January 1, 2005 to February 7, 2005 (Predecessor) and the three months ended March 31,
2004 (Predecessor)

4Consolidated Statement of Stockholders' Equity for the three months ended March 31, 2005

5Notes to Condensed Consolidated Financial Statements

6Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

26Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36Item 4.

Controls and Procedures

37


1

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CKX, Inc.        Condensed Consolidated Balance Sheets

|                                                                                                                         |                                                                                                           |   |         |        |   | Predecessor
Company
|------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------- | - | ------- | ------ | - | -------------------
|
|
|ASSETS                                                                                                                   |                                                                                                           |   |         |        |   |                    
|Cash and cash equivalents                                                                                                |                                                                                                           | $ | 17,312  |        | $ |                   
|Receivables                                                                                                              |                                                                                                           |   | 27,407  |        |   |                   
|Inventories                                                                                                              |                                                                                                           |   | 1,783   |        |   |                   
|Prepaid expenses                                                                                                         |                                                                                                           |   | 980     |        |   |                   
|Deferred tax asset                                                                                                       |                                                                                                           |   | 1,500   |        |   |                   
|                                                                                                                         |                                                                                                           |   |         |        |   |                    
|Total current assets                                                                                                     |                                                                                                           |   | 48,982  |        |   |                   
|Property and equipmentnet                                                                                               |                                                                                                           |   | 27,026  |        |   |                   
|Deferred production costs and advances                                                                                   |                                                                                                           |   | 7,906   |        |   |                   
|Other assets                                                                                                             |                                                                                                           |   | 14,756  |        |   |                   
|Goodwill                                                                                                                 |                                                                                                           |   | 148,843 |        |   |                   
|Other intangible assetsnet                                                                                              |                                                                                                           |   | 140,459 |        |   |                   
|Receivables                                                                                                              |                                                                                                           |   | 2,012   |        |   |                   
|Deferred tax asset                                                                                                       |                                                                                                           |   |        |        |   |                   
|                                                                                                                         |                                                                                                           |   |         |        |   |                    
|TOTAL ASSETS                                                                                                             |                                                                                                           | $ | 389,984 |        | $ |                   
|                                                                                                                         |                                                                                                           |   |         |        |   |                    
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                     |                                                                                                           |   |         |        |   |                    
|Current liabilities:                                                                                                     |                                                                                                           |   |         |        |   |                    
|Accounts payable                                                                                                         |                                                                                                           | $ | 3,339   |        | $ | 269                
|Accrued expenses                                                                                                         |                                                                                                           |   | 18,466  |        |   |                   
|Loans payable                                                                                                            |                                                                                                           |   | 148,056 |        |   |                   
|Deferred purchase consideration                                                                                          |                                                                                                           |   | 36,200  |        |   |                   
|Current portion of note payable                                                                                          |                                                                                                           |   | 362     |        |   |                   
|Income taxes payable                                                                                                     |                                                                                                           |   | 607     |        |   |                   
|Deferred revenue                                                                                                         |                                                                                                           |   | 11,911  |        |   |                   
|                                                                                                                         |                                                                                                           |   |         |        |   |                    
|Total current liabilities                                                                                                |                                                                                                           |   | 218,941 |        |   | 269                
|Long-term liabilities:                                                                                                   |                                                                                                           |   |         |        |   |                    
|Long-term debt                                                                                                           |                                                                                                           |   |        |        |   |                   
|Note payable                                                                                                             |                                                                                                           |   | 3,138   |        |   |                   
|Deferred revenue                                                                                                         |                                                                                                           |   | 1,803   |        |   |                   
|Deferred tax liability                                                                                                   |                                                                                                           |   | 33,900  |        |   |                   
|                                                                                                                         |                                                                                                           |   |         |        |   |                    
|Total liabilities                                                                                                        |                                                                                                           |   | 257,782 |        |   | 269                
|Minority interest                                                                                                        |                                                                                                           |   | 3,950   |        |   |                   
|Redeemable restricted common stock, 1,672,170 shares outstanding at March 31, 2005                                       |                                                                                                           |   | 23,002  |        |   |                   
|Stockholders' equity:                                                                                                    |                                                                                                           |   |         |        |   |                    
|Preferred stock, $0.01 par value, authorized 75,000,000 shares:                                                          |                                                                                                           |   |         |        |   |                    
|                                                                                                                         | Series A, no shares outstanding at March 31, 2005                                                         |   |         |       |   |                    
|                                                                                                                         | Series B, 1,491,817 shares outstanding at March 31, 2005                                                  |   |         | 22,825 |   |                    
|                                                                                                                         | Series C, 1 share outstanding at March 31, 2005                                                           |   |         |       |   |                    
|Common stock: authorized 200,000,000 shares, 66,772,025 shares issued and outstanding at March 31, 2005, $0.01 par value |                                                                                                           |   | 668     |        |   |                   
|                                                                                                                         | 100,000,000 shares authorized, 4,283,061 shares issued and outstanding at December 31, 2004, no par value |   |         |       |   |                    
|Additional paid-in-capital                                                                                               |                                                                                                           |   | 119,310 |        |   | 12,249             
|Net assets                                                                                                               |                                                                                                           |   |        |        |   |                   
|Accumulated deficit                                                                                                      |                                                                                                           |   | (37,583 | )      |   | (18,633            
|Accumulated other comprehensive income                                                                                   |                                                                                                           |   | 30      |        |   |                   
|                                                                                                                         |                                                                                                           |   |         |        |   |                    
|Total stockholders' equity                                                                                               |                                                                                                           |   | 105,250 |        |   | (269               
|                                                                                                                         |                                                                                                           |   |         |        |   |                    
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                               |                                                                                                           | $ | 389,984 |        | $ |                   
|                                                                                                                         |                                                                                                           |   |         |        |   |                    

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

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CKX, Inc.        Condensed Consolidated Statements Of Operations

|                                                   |  |   |            |   |   | Predecessor Company |  
|-------------------------------------------------- |  | - | ---------- | - | - | ------------------- | -
|
|
|Revenue                                            |  | $ | 9,987      |   | $ |                    |  
|Operating expenses:                                |  |   |            |   |   |                     |  
|Cost of sales                                      |  |   | 1,488      |   |   |                    |  
|Selling, general and administrative expenses       |  |   | 4,466      |   |   | 24                  |  
|Corporate expenses                                 |  |   | 2,059      |   |   |                    |  
|Depreciation and amortization expenses             |  |   | 1,261      |   |   |                    |  
|Other costs ($1.2 million paid to related party)   |  |   | 2,175      |   |   |                    |  
|                                                   |  |   |            |   |   |                     |  
|Total operating expenses                           |  |   | 11,449     |   |   | 24                  |  
|                                                   |  |   |            |   |   |                     |  
|Operating income (loss)                            |  |   | (1,462     | ) |   | (24                 | )
|Interest expense, net                              |  |   | 958        |   |   | 3                   |  
|                                                   |  |   |            |   |   |                     |  
|Income (loss) before other income and income taxes |  |   | (2,420     | ) |   | (27                 | )
|Other income                                       |  |   | 700        |   |   |                    |  
|                                                   |  |   |            |   |   |                     |  
|Income (loss) before income taxes                  |  |   | (1,720     | ) |   | (27                 | )
|Income tax (benefit)/expense                       |  |   | (990       | ) |   |                    |  
|                                                   |  |   |            |   |   |                     |  
|Income (loss) before minority interest             |  |   | (730       | ) |   | (27                 | )
|Minority interest                                  |  |   | 194        |   |   |                    |  
|                                                   |  |   |            |   |   |                     |  
|Net income (loss)                                  |  |   | (924       | ) |   | (27                 | )
|Dividends on preferred stock                       |  |   | (264       | ) |   |                    |  
|Accretion of beneficial conversion feature         |  |   | (17,762    | ) |   |                    |  
|                                                   |  |   |            |   |   |                     |  
|Net income (loss) available to common shareholders |  | $ | (18,950    | ) | $ | (27                 | )
|                                                   |  |   |            |   |   |                     |  
|Loss per share:                                    |  |   |            |   |   |                     |  
|Basic and diluted loss per share                   |  | $ | (0.61      | ) | $ | (0.01               | )
|                                                   |  |   |            |   |   |                     |  
|Average number of common shares outstanding:       |  |   |            |   |   |                     |  
|Basic and diluted                                  |  |   | 31,169,140 |   |   | 4,240,061           |  

The
accompanying notes are an integral part of these condensed consolidated financial statements.

3

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CKX, Inc.        Condensed Consolidated Statements Of Cash Flows

|                                                                                                   |                                                     |   |          |          |   | Predecessor Company |    
|-------------------------------------------------------------------------------------------------- | --------------------------------------------------- | - | -------- | -------- | - | ------------------- | ---
|
|
|Cash flows from operating activities:                                                              |                                                     |   |          |          |   |                     |    
|Net income (loss)                                                                                  |                                                     | $ | (924     | )        | $ | (27                 | )  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |                                                     |   |          |          |   |                     |    
|Depreciation and amortization                                                                      |                                                     |   | 1,261    |          |   |                    |    
|Deferred income tax benefit                                                                        |                                                     |   | (2,389   | )        |   |                    |    
|(Decrease) increase in operating assets and liabilities:                                           |                                                     |   |          |          |   |                     |    
|Receivables                                                                                        |                                                     |   | (2,149   | )        |   |                    |    
|Inventory                                                                                          |                                                     |   | 342      |          |   |                    |    
|Deferred production costs                                                                          |                                                     |   | (108     | )        |   |                    |    
|Prepaid expenses and other                                                                         |                                                     |   | (1,104   | )        |   |                    |    
|Accounts payable                                                                                   |                                                     |   | 3,169    |          |   |                    |    
|Accrued expenses                                                                                   |                                                     |   | 1,207    |          |   |                    |    
|Income taxes payable                                                                               |                                                     |   | 384      |          |   |                    |    
|Minority interest                                                                                  |                                                     |   | 194      |          |   |                    |    
|Deferred revenue                                                                                   |                                                     |   | 303      |          |   |                    |    
|                                                                                                   |                                                     |   |          |          |   |                     |    
|                                                                                                   | Net cash provided by (used in) operating activities |   |          | 186      |   |                     | (27
|                                                                                                   |                                                     |   |          |          |   |                     |    
|Cash flows from investing activities:                                                              |                                                     |   |          |          |   |                     |    
|Acquisition of Presley Business, net of cash acquired of $1,904                                    |                                                     |   | (81,706  | )        |   |                    |    
|Acquisition of 19 Entertainment, net of cash acquired of $2,528                                    |                                                     |   | (122,580 | )        |   |                    |    
|Purchases of property and equipment                                                                |                                                     |   | (196     | )        |   |                    |    
|                                                                                                   |                                                     |   |          |          |   |                     |    
|                                                                                                   | Net cash used in investing activities               |   |          | (204,482 | ) |                     |   
|                                                                                                   |                                                     |   |          |          |   |                     |    
|Cash flows from financing activities:                                                              |                                                     |   |          |          |   |                     |    
|Issuance of common stock                                                                           |                                                     |   | 3,058    |          |   |                    |    
|Exercise of warrants                                                                               |                                                     |   | 30,000   |          |   |                    |    
|Proceeds from Huff investment                                                                      |                                                     |   | 43,819   |          |   |                    |    
|Proceeds from credit facilities                                                                    |                                                     |   | 148,000  |          |   |                    |    
|Costs associated with Huff investment and credit facility                                          |                                                     |   | (3,207   | )        |   |                     |    
|Increase in due to affiliates                                                                      |                                                     |   |         |          |   | 27                  |    
|Prinicipal payments on long-term debt                                                              |                                                     |   |         |          |   |                    |    
|Distributions to trust beneficiary                                                                 |                                                     |   |         |          |   |                    |    
|                                                                                                   |                                                     |   |          |          |   |                     |    
|                                                                                                   | Net cash provided by (used in) financing activities |   |          | 221,670  |   |                     | 27 
|                                                                                                   |                                                     |   |          |          |   |                     |    
|Effect of exchange rate changes on cash                                                            |                                                     |   | (62      | )        |   |                    |    
|                                                                                                   |                                                     |   |          |          |   |                     |    
|Net increase in cash and equivalents                                                               |                                                     |   | 17,312   |          |   |                    |    
|                                                                                                   |                                                     |   |          |          |   |                     |    
|Cash and cash equivalentsbeginning of period                                                      |                                                     |   |         |          |   |                    |    
|                                                                                                   |                                                     |   |          |          |   |                     |    
|Cash and cash equivalentsend of period                                                            |                                                     | $ | 17,312   |          | $ |                    |    
|                                                                                                   |                                                     |   |          |          |   |                     |    
|Supplemental cash flow data (Also see note 13):                                                    |                                                     |   |          |          |   |                     |    
|Cash paid during the period for:                                                                   |                                                     |   |          |          |   |                     |    
|                                                                                                   | Interest                                            |   | $        | 1        |   | $                   |   
|                                                                                                   | Income taxes                                        |   |          |         |   |                     |   

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

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CKX, Inc.        Condensed Consolidated Statement Of Stockholders' Equity        (in thousands, except share data)

|                                                                               |  | Preferred Stock |   |   |         |   |           |  |   |        |  |   |  |   |  
|------------------------------------------------------------------------------ |  | --------------- | - | - | ------- | - | --------- |  | - | ------ |  | - |  | - | -
|
|
|
|Balance at January 1, 2005                                                     |  |                |   | $ |        |   |          |  | $ |       |  |  |  | $ | 
|Change of par value to $0.01 per share                                         |  |                |   |   |        |   |          |  |   |       |  |  |  |   | 
|Issuance of common shares                                                      |  |                |   |   |        |   |          |  |   |       |  |  |  |   | 
|Huff investment                                                                |  | 2,172,400       |   |   | 17,762  |   |          |  |   |       |  |  |  |   | 
|Recognition of beneficial conversion feature                                   |  |                |   |   | (17,762 | ) |          |  |   |       |  |  |  |   | 
|Warrant exercises                                                              |  |                |   |   |        |   |          |  |   |       |  |  |  |   | 
|Shares issued for acquisitions                                                 |  |                |   |   |        |   | 1,491,817 |  |   | 22,825 |  | 1 |  |   | 
|Restricted shares issued to independent directors                              |  |                |   |   |        |   |          |  |   |       |  |  |  |   | 
|Conversion of Series A Preferred and accretion of benefical conversion feature |  | (2,172,400      | ) |   |        |   |          |  |   |       |  |  |  |   | 
|Series B Preferred dividend                                                    |  |                 |   |   |         |   |           |  |   |        |  |   |  |   |  
|Net loss                                                                       |  |                |   |   |        |   |          |  |   |       |  |  |  |   | 
|Other comprehensive income                                                     |  |                |   |   |        |   |          |  |   |       |  |  |  |   | 
|                                                                               |  |                 |   |   |         |   |           |  |   |        |  |   |  |   |  
|Balance at March 31, 2005                                                      |  |                |   | $ |        |   | 1,491,817 |  | $ | 22,825 |  | 1 |  | $ | 
|                                                                               |  |                 |   |   |         |   |           |  |   |        |  |   |  |   |  

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

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CKX, Inc.        Notes To Condensed Consolidated Financial Statements

1.    Basis of Presentation

CKX, Inc. (the "Company") is engaged in the ownership, development and commercial utilization of entertainment content, including the rights to the name,
image and likeness of Elvis Presley, the operations of Graceland and proprietary rights to theIDOLStelevision brand, including the American Idol
series in the United States, the Pop Idol series in the United Kingdom and local adaptations of theIDOLStelevision show format which, collectively,
air in over 30 countries around the world.

The
financial information in this report has not been audited, but in the opinion of management all adjustments (consisting only of normal recurring adjustments) considered necessary to
present fairly such information have been included. The operating results for the three months ended March 31, 2004 and 2005 are not necessarily indicative of results to be expected for the
full year due to the seasonal nature of some of the Company's businesses and due to the timing of the transactions described below. The financial statements included herein should be read in
conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2004 and in the Company's Current
Report on Form 8-K/A filed on February 11, 2005.

On
February 7, 2005, RFX Acquisition LLC, an entity formed and controlled by Robert F.X. Sillerman, acquired a controlling interest in the Company (formerly known as Sports
Entertainment Enterprises, Inc.), which had been inactive since it sold all of its assets in August 2002. Simultaneous with that transaction, the Company acquired an 85% interest in the
entities which owned and/or controlled certain content relating to Elvis Presley (the "Presley Business"). Prior to the acquisition of the Presley Business, the Company did not have any operations. As
a result, the Presley Business is considered to be a predecessor company ("Predecessor"). Accordingly, relevant financial information regarding the Predecessor has been presented herein.

On
March 17, 2005, the Company acquired 100% of 19 Entertainment Limited, a private limited company incorporated under the laws of England and Wales, that is a creator, producer
and promoter of entertainment properties, including theIDOLStelevision show format ("19 Entertainment").

On
March 25, 2005 the Company changed its name from Sports Entertainment Enterprises, Inc. to CKX, Inc., changed its state of incorporation from Colorado to Delaware
and changed its capital stock from no par value to $0.01 par value per share.

The
accompanying financial statements have been prepared on the basis that the Company is a going concern. The Company has $148.1 million of loans payable which are scheduled to
be repaid in the first quarter of 2006. The Company intends to repay the loans with a portion of the proceeds from a public offering of its common stock (see Note 14). If we are unable to
complete the equity offering, we intend to pursue alternative financing arrangements or renegotiate the repayment terms of the loans. No assurance can be given that we will be able to complete such
public offering on terms acceptable to the Company or obtain alternative financing which will raise sufficient funds to repay the loans or that we will be able to renegotiate the repayment terms of
the loans on terms consistent with the Company's business plan.

2.    Summary of Significant Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements include the accounts of all subsidiaries. All intercompany accounts and transactions have been eliminated.

6

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Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted within the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are classified as cash and cash equivalents. The fair value of cash and cash
equivalents approximates the amounts shown on the financial statements. Cash and cash equivalents consist of unrestricted cash in accounts maintained with major financial institutions.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, which
range from 3 to 39 years. Expenditures for additions, major renewals, and betterments are capitalized. Maintenance and repairs not representing betterments are expensed as incurred.

Revenue Recognition

Merchandising/Name and Likeness Licensing Revenues:

A
portion of the Company's revenue is derived from licensing rights to third parties to sell merchandise based on intellectual property, including name, image and likeness rights and
related marks. Revenue from these activities is recognized when all of the following conditions are met: (i) pervasive evidence of an arrangement exists; (ii) delivery has occurred or
services have been rendered; (iii) the price to the licensee or buyer is fixed or determinable; and (iv) collectibility is reasonably assured. Licensing advances are deferred until
earned under the licensing agreement. Licensing contracts normally provide for quarterly reporting from the licensee of sales made and royalties due. Guaranteed minimum
royalties are recognized ratably over the term of the license or are based on sales of the related products, if greater.

Royalty
Income:

Income
from music and film contracts is derived from the sale of records and DVDs or from the licensing of film/music rights to third parties. Revenue from recordings is recognized in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 50,Financial Reporting in the Record and Music Industry("SFAS 50").
Under SFAS 50, revenue is recognized when the Company: (i) has signed a non-cancelable contract; (ii) has delivered the rights to the licensee who is free to exercise them;
(iii) has no remaining significant obligations to furnish music or records; and (iv) when collectibility of the full fee is reasonably assured. A significant portion of royalty income is
paid to the Company based on the timetable associated with royalty statements generated by third party processors, and is not typically known by the Company on a timely basis. This revenue is
consequently recognized if the amount of accrual is not known or reasonably estimable until receipt of the statements from the third parties. The Company contracts with various agencies to facilitate
collection of royalty income.

When
the Company is entitled to royalties based on gross receipts, revenue is recognized before deduction of agency fees, which are included in the financial statements as a component of cost of
sales.

7

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The
Company recognizes revenues for television and film productions pursuant to American Institute of Certified Public Accountants Statement of Position 00-2, Accounting by Producers or Distributors of Films("SOP 00-2"). The following conditions must be met in order to recognize revenue under SOP
00-2: (i) persuasive evidence of a sale or licensing arrangement exists; (ii) the program is complete and has been delivered or is available for immediate and unconditional
delivery; (iii) the license period of the arrangement has begun and the customer can begin its exploitation, exhibition or sale; (iv) the arrangement fee is fixed or determinable; and
(v) collection of the arrangement fee is reasonably assured. Advance payments received from buyers or licensees are included in the financial statements as a component of deferred revenue.



The
Company derives revenue from sponsorships associated with certain of its television productions and tours. Sponsorship fees relate to either (a) a one-time event,
or (b) a period of time. Revenues from a one-time event are recognized if: (i) pervasive evidence of an arrangement exists; (ii) the event has occurred;
(iii) the price is fixed or determinable; and (iv) collectibility is reasonably assured. Non-refundable advance payments associated with sponsorships over a period of time
are recognized on a straight line basis over the term of the contract from the later of the point at which: (a) pervasive evidence of an arrangement exists; (b) delivery has occurred or
services have been rendered; (c) the price is fixed or determinable; and (d) collectibility is reasonably assured, or, the beginning of the license period. Sponsorship advances are
deferred until earned pursuant to the sponsorship agreement.



Ticket
sales for tours and exhibits at Graceland, as well as merchandise sales and food and beverage sales are recognized at point of sale. Advance ticket sales are recorded as deferred
revenue pending the "event date" on the ticket.

Television and Film Production Costs

The cost of producing television and film programs is capitalized and recognized as expense in accordance with the individual film forecast method specified in
SOP 00-2, pursuant to which the Company estimates the ratio that revenue which is earned for such programming in the current period bears to its estimate at the beginning of the current
year of total revenues to be realized from all media and markets for such programming. Amortization commences in the period in which revenue recognition commences. Management regularly reviews and
revises its total revenue estimates for each project, which may result in modifications to the rate of amortization. If a net loss is projected for a particular project, the related capitalized costs
are written down to estimated realizable value.

The
Company also accounts for its film and television projects in development pursuant to SOP 00-2. Third party costs incurred in producing television programs and films for
which the Company has secured distribution agreements are capitalized and remain unamortized until the project is distributed or are written off at the time they are determined not to be recoverable.
Third party costs incurred in developing concepts for new television programs and films are expensed as incurred until such time as the Company has secured distribution agreements.

8

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Artist Advances and Recoupable Recording Costs

Recoupable recording costs and artist advances, as adjusted for anticipated returns, are recognized in accordance with SFAS 50, and thus, are charged to expense
in the period in which the sale of the record takes place. Recoupable recording costs and artist advances are only capitalized if the past performance and current popularity of the artist for whom the
recording costs are incurred or to whom the advance is made provide a sound basis for estimating that the amount capitalized will be recoverable from future royalties to be earned by the artist. Any
portion of recoupable recording costs or artists advances that subsequently appear not to be fully recoverable from future royalties to be earned by the artist are charged to expense during the period
in which the loss becomes evident.

Advertising Expense

Advertising costs are expensed as incurred.

Income Taxes

The Company accounts for its income taxes using SFAS No. 109,Accounting for Income Taxes.Under
SFAS 109, deferred income taxes arise from temporary differences between the financial statement and tax basis of assets and liabilities. The Company's deferred taxes primarily result from
temporary differences in the recognition of amortization of intangible assets, depreciation, reserve for bad debts and inventory and accrued vacation for financial reporting and tax reporting
purposes.

Foreign Currency Translation

The Company has operations in several foreign countries, primarily the United Kingdom. In the normal course of business these operations are exposed to
fluctuations in currency values. Balance sheets of international operations are translated into U.S. dollars at period-end exchange rates while the statements of operations are translated
at average exchange rates. Adjustments resulting from financial statement translations are included as cumulative translation adjustments in accumulated other comprehensive income.

Goodwill and Other Intangible Assets

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses
acquired. The Company follows SFAS No. 142,Goodwill and Other Intangible Assets("SFAS 142"). Goodwill and other intangible assets with
indefinite lives are not amortized, but instead are tested for impairment annually, or, if certain circumstances indicate a possible impairment may exist, in accordance with the provisions of
SFAS 142. The Company will evaluate the recoverability of goodwill and indefinite lived intangible assets using a two-step impairment test approach at the reporting unit level. In
the first step the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than the book value, a second step
is performed which compares the implied fair value of the reporting unit's goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the
fair values of the reporting units and the net fair values of the identifiable assets and liabilities of such reporting units. If the fair value of the goodwill is less than the book value, the
difference is recognized as an impairment.

SFAS 142
also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to the estimated residual values. The Company
will perform its annual

9

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impairment
assessment on goodwill and indefinite lived intangible assets in accordance with the methods prescribed above on the first day of its fiscal fourth quarter.

The
Company will account for impairment of long-lived assets in accordance with SFAS 144,Accounting for the Impairment or Disposal of
Long-Lived Assets("SFAS 144"). SFAS 144 establishes a uniform accounting model for the disposal of long-lived assets. The Company will
evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence,
recoverability of assets to be held and used is measured by comparing the carrying amount
of an asset to forecasted undiscounted future net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Impact of Recently Issued Accounting Standards

In December 2004, the FASB issued a revision to SFAS No. 123,Accounting for Stock-Based
Compensation. This revision will require us to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date
fair value of the award. The cost will be recognized over the period during which an employee is required to provide service in exchange for the award. This revised Statement is effective as of the
beginning of the first annual reporting period that begins after June 15, 2005. This revised Statement will apply to all awards granted after the required effective date and to awards modified,
repurchased or canceled after that date. As of the required effective date, we will apply this revised Statement using a modified version of prospective application. Under that transition method,
compensation cost is recognized on or after the required effective date for the portion of outstanding awards for which the requisite service has not yet been rendered, based on the
grant-date fair value of those awards calculated under SFAS No. 123 for either recognition or pro forma disclosures. We adopted SFAS No. 123R effective January 1,
2005.

In
December 2004, the FASB issued SFAS No. 153,Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29.
This statement amends APB No. 29,Accounting for Nonmonetary Transactions, to eliminate the exception for nonmonetary exchanges of similar
productive assets under APB No. 29 and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. The statement is effective for financial
statements for fiscal years beginning after June 15, 2005. The adoption of the statement is not expected to have a material effect on the Company's consolidated financial position, results of
operations and cash flows.

3. Capital Structure and Predecessor

Following
is a description of changes to the Company's capital structure that occurred during the three months ended March 31, 2005:



On February 7, 2005, RFX Acquisition LLC, an entity formed and controlled by Robert F.X. Sillerman, contributed $3,046,407 in cash to the Company in
exchange for 30,464,072 newly issued shares of common stock and warrants to purchase (i) 6,828,938 shares of common stock at $1.00 per share, (ii) 6,828,938 shares of common stock at
$1.50 per share, and (iii) 6,828,939 shares of common stock at $2.00 per share (the "RFX Investment"). Simultaneous with this exchange, RFX Acquisition LLC also acquired an aggregate of
2,240,397 shares of common stock directly from certain former principal

10

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stockholders
at a price of $0.10 per share. Immediately following the consummation of its investment in the Company, RFX Acquisition LLC distributed all of its shares of common stock and its warrants
to its members, including the Company's Chief Executive Officer, Mr. Sillerman, and certain members of the Company's senior management. In order to provide additional capital to the Company, on
February 7, 2005, certain recipients of the warrants, including Mr. Sillerman, and other members of the Company's senior management, exercised an aggregate of five million of the $1.00
warrants for additional aggregate consideration to the Company of $5,000,000.



On February 7, 2005, the Company acquired 85% of the Presley Business from The Promenade Trust, in exchange for (i) $50.1 million in cash,
(ii) 1,491,817 shares of Series B Convertible Preferred Stock, (iii) one share of Series C Convertible Preferred Stock, (iv) 500,000 shares of common stock and
(v) the repayment of $25.1 million in indebtedness (the "Presley Acquisition").



The
common stock issued in the Presley Acquisition was valued at $7.67 per share, which represents the three day average of the closing sales price of the Company's common stock
following the public announcement of the acquisition of the Presley Business. The Company's stock price prior to the announcement was not utilized since the Company had no operations at that time.



The
1,491,817 shares of Series B Convertible Preferred Stock issued in the Presley Acquisition were valued at $22,825,000. Each share of Series B Convertible Preferred
Stock has a stated value of $15.30 and entitles the holder to receive an annual dividend calculated at a rate of 8% of the stated value. The Series B Convertible Preferred Stock has been valued
for accounting purposes at its stated value of $15.30 per share. The stated value approximates the fair value of the Series B Convertible Preferred Stock based on the securities liquidation
preferences, annual dividend of 8%, conversion feature and the fair value of the underlying common stock.

The
shares of Series B Convertible Preferred Stock are convertible by its holders into shares of common stock at any time at a conversion price equal to the stated value, subject
to adjustments in connection with standard anti-dilution protections for stock splits, stock dividends and reorganizations. The shares of Series B Convertible Preferred Stock become
convertible at the Company's option from and after the third anniversary of the date of issuance, if, at any time, the average closing price of the Company's common stock over a thirty day trading
period equals or exceeds 150% of the conversion price.

During
the period beginning August 7, 2012 and ending August 7, 2013, the Company can, at its sole discretion, redeem the outstanding shares of Series B Convertible
Preferred Stock, in whole or in part, for an aggregate price equal to the stated value plus accrued but unpaid dividends through the date of redemption. If the Company does not exercise this
redemption right, the conversion price for all remaining shares of Series B Convertible Preferred Stock is thereafter reduced to the lower of (i) the conversion price then in effect and
(ii) or the average closing price of the Company's common stock over a thirty day trading period measured as of the last day of the redemption period.

The
Series B Convertible Preferred Stock has been classified as permanent equity in the accompanying financial statements as the security is redeemable in cash solely at the
option of the Company.

11

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The
share of Series C Convertible Preferred Stock issued in the Presley Acquisition had nominal value at issuance. The Series C Convertible Preferred Stock is convertible
into one share of common stock and ispari passuwith the common stock with respect to dividends and distributions upon liquidation. The Series C
Convertible Preferred Stock is not transferable and automatically converts into one share of common stock at such time as The Promenade Trust ceases to own at least 50% of the aggregate sum of the
outstanding shares of Series B Convertible Preferred Stock plus the shares of common stock received upon conversion of the Series B Convertible Preferred Stock. The holder of the
Series C Convertible Preferred Stock has the right to elect a designee to serve on the Company's board of directors for no additional compensation or expense.

The
Series C Convertible Preferred Stock has been classified as permanent equity in the accompanying financial statements as the security is not redeemable and is convertible
solely into one share of the Company's common stock.



Simultaneous with the RFX Investment and the Presley Acquisition, The Huff Alternative Fund, L.P. and its affiliate contributed to the Company an aggregate of
$43,319,000 in cash, after fees and expenses, in exchange for: (i) 2,172,400 shares of Series A Convertible Redeemable Preferred Stock, (ii) 3,706,052 newly issued shares of
common stock, (iii) warrants to purchase 1,860,660 shares of common stock at $1.00 per share, (iv) warrants to purchase 1,860,660 shares of common stock at $1.50 per share, and
(v) warrants to purchase 1,860,661 shares of common stock at $2.00 per share. The Huff investment has been allocated based on the relative fair values of the preferred stock, common stock and
warrants. The fair values of common stock and Series A Convertible Redeemable Preferred Stock were based on the $13.40 closing price of the Company's common stock on February 2, 2005,
the date upon which the Huff Investment was committed and agreed to by all parties. The fair values of the warrants was based on a Black-Scholes valuation which incorporated the common stock price of
$13.40, a volatility rate of 39% and a discount rate of 3.7%. The allocation of the proceeds, based on the relative fair values of the securities issued to Huff, were as follows: common
stock$10.9 million; warrants$14.7 million; and Series A Convertible Redeemable Preferred Stock$17.8 million.

On
March 21, 2005, The Huff Alternative Fund, L.P. and its affiliate exercised their rights to convert all of their 2,172,400 shares of Series A Convertible
Redeemable Preferred Stock into 6,051,253 shares of common stock. Following such conversion, there are currently no shares of Series A Convertible Redeemable Preferred Stock outstanding.
The terms of the Series A Convertible Redeemable Preferred Stock at issuance and prior to the conversion into common stock are described below.

At
issuance, each share of Series A Convertible Redeemable Preferred Stock had a stated value of $20.00 per share and was convertible into common stock at a conversion price as
more fully described below. Holders of the Series A Convertible Redeemable Preferred Stock were not entitled to any dividends beyond participating on an as converted basis in dividends declared
with respect to the common stock. The shares of Series A Convertible Redeemable Preferred Stock were convertible into common stock at any time at the option of the holder. The shares of
Series A Convertible Redeemable Preferred Stock were to become convertible at the Company's option if, at any time following the third anniversary of issuance the average closing price of the
common stock over a thirty day trading period equaled or exceeded $15.00. In addition, if, at any time after issuance, (i) the total market capitalization of the outstanding shares of common
stock equaled or exceeded $500 million, and (ii) the average closing price of the common stock

12

---



over
a period of thirty consecutive trading days equaled or exceeded $15.00, then the Company would have had the right to convert such number of shares of Series A Convertible Redeemable
Preferred Stock with an aggregate stated value of up to 25% of the market value of all publicly traded common stock (excluding shares held by affiliates of the Company). The Company could not force
conversion of any shares of Series A Convertible Redeemable Preferred Stock during the lockup period described below.

The
holders of the Series A Convertible Redeemable Preferred Stock had certain anti-dilution protection with respect to the Series A Convertible Redeemable
Preferred Stock. The conversion price of the Series A Convertible Redeemable Preferred Stock, which was $10.00 per share at issuance, was subject to adjustment upon (i) issuances of
common stock at a price below $10.00 per share, and (ii) the exercise or conversion of convertible stock, warrants, options (other than employee incentive stock options) or other similar
derivatives relating to common stock, in each case at a price below $10.00 per share.

The
terms of the Series A Convertible Redeemable Preferred Stock specifically provided for an adjustment for the issuance of the 15,486,815 warrants issued but not exercised by
the recipients thereof immediately following the closing of the Presley Acquisition, but no adjustment in connection with the issuance and exercise of the warrants received by the Huff Alternative
Fund LP or the Huff Alternative Parallel Fund LP at closing or for the 5,000,000 warrants which were issued and exercised immediately following closing. After giving effect to the
adjustments described in the preceding sentence, the conversion price of the Series A Convertible Redeemable Preferred Stock became $7.18 per share of common stock, so that each share of
Series A Convertible Redeemable Preferred Stock was convertible into approximately 2.8 shares of common stock.

During
the first three years following issuance, the Company had the option to redeem part or all of the Series A Convertible Redeemable Preferred Stock using up to 25% of the
proceeds from each registered public offering or private investment in public equity ("PIPES") transaction: (i) during the first twelve months following issuance, at a price of $23.10 per
share, and (ii) at all times thereafter, at a price that would have provided the holders of the Series A Convertible Redeemable Preferred Stock with an internal rate of return of 15.5%
on the shares of Series A Convertible Redeemable Preferred Stock being sold. Upon a liquidation, the holders of the Series A Convertible Redeemable Preferred
Stock were entitled to receive in preference to the holders of any other class or series of the Company's equity securities (other than the Series B Convertible Preferred Stock) a cash amount
per share equal to the greater of the stated value plus any accrued but unpaid dividends or the amount to which they would be entitled had they converted to Common Stock.

If,
after six years following issuance, the aggregate return to the holders of the Series A

Convertible
Redeemable Preferred Stock did not equal or exceed 8%, then the holders of the Series A Convertible Redeemable Preferred Stock would have been entitled to receive a distribution of
cash or additional shares of Series A Convertible Redeemable Preferred Stock so that the return calculated to such date equaled 8% (the "Total Return Amount").

In
the event that any holder of Series A Convertible Redeemable Preferred Stock had not converted its shares as of the eighth anniversary of the date of issuance, the Company
would have been required to redeem 100% of the outstanding shares of Series A Convertible Redeemable Preferred Stock for an aggregate price equal to the stated value multiplied by the number of
shares of Series A Convertible Redeemable Preferred Stock then being redeemed plus any Total Return Amount owed but not paid in accordance with the preceding paragraph.

13

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As
a result of the redemption right described above, the Series A Convertible Redeemable Preferred Stock was initially recorded as temporary equity. Following the March 21,
2005 conversion into common stock, the Series A Convertible Redeemable Preferred Stock was reclassified as permanent equity.

The
allocation of the proceeds from the Huff Investment resulted in a beneficial conversion feature for the Series A Convertible Redeemable Preferred Stock in the amount of
$17.8 million, which reduced the carrying value of the Series A Convertible Redeemable Preferred Stock by that amount. This was due in part to the allocation of proceeds raised to the
warrants as well as the conversion ratio of one share of preferred stock into 2.8 shares of common stock as previously described. This beneficial conversion feature was to be accreted over the
eight-year redemption period and recorded as a preferred dividend. As a result of the conversion described above, a dividend equal to the amount of the unaccreted beneficial conversion
feature of $17.8 million was recognized at that time.



On March 25, 2005, we changed our state of incorporation from Colorado to Delaware and changed our capital stock from no par value to $0.01 par value per
share.

4.    Comprehensive Income

The following table is a reconciliation of the Company's net loss to comprehensive loss for the three months ended March 31, 2005:

|                                         |  | (in thousands) |     
|---------------------------------------- |  | -------------- | ----
|Net loss                                 |  | $              | (924
|Other comprehensive income:              |  |                |     
|Foreign currency translation adjustments |  |                | 30  
|                                         |  |                |     
|Comprehensive loss                       |  | $              | (894
|                                         |  |                |     

Foreign
currency translation adjustments result from the conversion of 19 Entertainment's financial statements for the period March 18, 2005 to March 31, 2005. There were
no differences between net income (loss) and comprehensive income (loss) for the period January 1, 2005 to February 7, 2005 or for the three months ended March 31, 2004.

14

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5.    Earnings Per Share/Common Shares Outstanding

Earnings per share is computed in accordance with SFAS No. 128,Earnings Per Share. Basic earnings per
share is calculated by dividing net income (loss) applicable to common stockholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share includes the
determinants of basic earnings per share and, in addition, gives effect to potentially dilutive common shares. Diluted earnings per share is not presented because the calculation is
anti-dilutive due to the reported net loss. As a result, 6,543,413 shares are excluded from the calculation of diluted earnings per share for the quarter ended March 31, 2005 since
the effect would be anti-dilutive.

6.    Acquisitions

The Presley Business (Predecessor)

On February 7, 2005, the Company acquired an 85% interest in entities which control the commercial utilization of the name, image and likeness of Elvis
Presley, the operation of Graceland and related attractions and revenue derived from Elvis' music, films, and television specials. The transaction was financed with a contribution of equity and
exercise of warrants by the members of RFX Acquisition LLC, the issuance of preferred and common stock to the seller, the purchase of preferred stock, common stock and warrants by the Huff Alternative
Fund, L.P. and an affiliate and a short-term senior loan from an affiliate of Bear Stearns & Co., Inc.

The
aggregate consideration paid for the acquisition was as follows:

|                                     |  | (in thousands)
|------------------------------------ |  | --------------
|Fair value of common stock issued    |  | $             
|Fair value of preferred stock issued |  |               
|Repayment of Presley debt            |  |               
|Note payable                         |  |               
|Cash                                 |  |               
|Estimated transaction costs          |  |               
|                                     |  |               
|                                     |  | $             
|                                     |  |               

The
following table summarizes the preliminary amounts allocated to the acquired assets and assumed liabilities based on a preliminary valuation prepared by an independent appraisal
firm. These amounts have been adjusted to reflect the Company's 85% ownership interest. The initial purchase price allocations

15

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are
preliminary and may be adjusted for changes in estimates of the fair value of the assets acquired and liabilities assumed.

|                         |  | (in thousands)
|------------------------ |  | --------------
|Current assets           |  | $             
|Property and equipment   |  |               
|Goodwill                 |  |               
|Intangible assets        |  |               
|Other assets             |  |               
|                         |  |               
|Assets acquired          |  |               
|Current liabilities      |  |               
|Deferred tax liabilities |  |               
|Other liabilities        |  |               
|                         |  |               
|Liabilities assumed      |  |               
|                         |  |               
|Net assets acquired      |  | $             
|                         |  |               

In
accordance with SFAS No. 109,Accounting for Income Taxes, we have provided for deferred taxes for the difference between the
book and tax basis of the net assets acquired.

Reflected
in the purchase price for the Presley Business is $3.0 million in prepaid rent for a 90-year lease on Graceland.

The
excess of the purchase price over the fair values of assets acquired and liabilities assumed was allocated to goodwill. The amounts allocated to intangible assets were attributed to
the following categories and related useful lives:

|                                                             |  | (Amounts in thousands) |        | 
|------------------------------------------------------------ |  | ---------------------- | ------ | 
|Record, music publishing, film and video rights              |  | $                      | 21,000 | 
|Relationships with licensees                                 |  |                        | 12,000 | 
|Rights to use Presley name                                   |  |                        | 5,500  | 
|Trademarks, publicity rights and other intellectual property |  |                        | 38,000 | 

The trademarks, including rights to the name, image and likeness of Elvis Presley, have indefinite lives and, accordingly, no amortization expense has been recorded in the accompanying condensed
consolidated financial statements.

The
Company is required to make annual distributions, in monthly installments that represent its 15% share of the operating income of the Presley Business before depreciation and
amortization and after income taxes and capital expenditures. The Company is required to pay a minimum annual distribution of $1.2 million for each full calendar year irrespective of the actual
operating results for the business in such year. To the extent that the minimum distribution exceeds the net income allocated to minority interest, the additional amount will be recorded as additional
minority interest expense.

The
Promenade Trust has the right to require the Company to purchase for cash all or a portion of its 15% ownership interest in the Presley Business from time to time beginning on
January 1, 2008. The price the Company will be required to pay to The Promenade Trust will be based on the then current fair market

16

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value
of the Presley Business as determined through an appraisal process. As the put right is at fair market value, no value has been assigned for accounting purposes to the put option. The results of
operations of the Presley Business are included in the results of the Company since the date of acquisition.

19 Entertainment

On March 17, 2005, the Company acquired 100% of the outstanding capital stock of 19 Entertainment Limited, a United Kingdom-based company that is a
creator, producer and promoter of entertainment properties, including theIDOLStelevision show format (the "19 Entertainment Acquisition"). The
acquisition was completed with £64.5 million (US $124.4 million) in cash and 1,870,558 unregistered shares of common stock, each paid at closing, with an additional
£19.2 million (US $36.9 million) in either cash or common stock to be paid following delivery of the audited results for the acquired company's fiscal year ended
June 30, 2005, or on December 30, 2005, which ever occurs earlier. The additional consideration can be requested in common stock by the sellers. If the sellers do not request the payment
in common stock (and therefore have selected to be paid in cash) and the Company has not completed a public sale or offering of equity securities for proceeds in excess of $40 million on or
before June 30, 2005, we can pay the full amount of such deferred consideration in shares of registered common stock. The 1,870,558 unregistered shares of common stock issued in the 19
Entertainment Acquisition were valued at $16.83 per share (which represents the average of the Company's closing stock prices for the two days prior to and the day of the 19 Entertainment
Acquisition). The stock prices subsequent to the consummation of the transaction were excluded from the average price in accordance with EITF 99-12,Determination
of the Measurement Date for the Market Price of Acquirer Securities Issued in a Purchase Business Combination.

In
connection with the acquisition of 19 Entertainment, certain sellers of 19 Entertainment entered into a Put and Call Option Agreement that provided them with certain
rights relating to the conversion shares whereby, during a short period following the six year anniversary of the acquisition, the Company can exercise a call right to purchase the common stock of
such stockholders at a price equal to $24.72 per share and these sellers can exercise a put right to sell the common stock to the Company at a price equal to $13.18 per share. The put and call rights
apply to 1,672,170 of the shares issued in connection with the 19 Entertainment acquisition. As a result, these shares have been presented in the accompanying balance sheet as temporary equity
under the heading Redeemable Restricted Common Stock at an estimated fair value inclusive of the put/call rights at $28.1 million.

The
value of the Put and Call Option Agreement at March 17, 2005 was estimated to be $5.1 million and was recorded as a reduction of purchase price as part of the purchase
accounting for 19 Entertainment.

The
Company financed the cash consideration with a short-term senior loan from an affiliate of Bear, Stearns & Co., Inc., and proceeds from the exercise of
outstanding warrants, including approximately $18,577,154 of proceeds from the exercise by certain members of senior management of warrants to acquire 11,910,281 shares of common stock and
approximately $6,422,846 of proceeds from the exercise by The Huff Alternative Fund, L.P. and its affiliate of warrants to acquire 4,606,918 shares of common stock.

17

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The
aggregate consideration paid for the acquisition was as follows:

|                                                                                   |  | (in thousands)
|---------------------------------------------------------------------------------- |  | --------------
|Fair value of common stock issued                                                  |  | $             
|Fair value of redeemable restricted common stock, including put and call agreement |  |               
|Deferred purchase consideration                                                    |  |               
|Cash                                                                               |  |               
|Estimated transaction costs                                                        |  |               
|                                                                                   |  |               
|                                                                                   |  | $             
|                                                                                   |  |               

The
following table summarizes the estimated fair values of the assets acquired and liabilities assumed on March 17, 2005. The estimated fair values are based on a preliminary
valuation performed by management. The Company has engaged an independent appraisal firm to perform a valuation of the assets acquired and liabilities assumed. Accordingly, the initial purchase price
allocations are preliminary and may be adjusted for changes in estimates of the fair value of the assets acquired and liabilities assumed.

|                         |  | (in thousands)
|------------------------ |  | --------------
|Current assets           |  | $             
|Property and equipment   |  |               
|Goodwill                 |  |               
|Intangible assets        |  |               
|Other assets             |  |               
|                         |  |               
|Assets acquired          |  |               
|Current liabilities      |  |               
|Deferred tax liabilities |  |               
|Other liabilities        |  |               
|                         |  |               
|Liabilities assumed      |  |               
|                         |  |               
|Net assets acquired      |  | $             
|                         |  |               

In
accordance with SFAS No. 109,Accounting for Income Taxes,we have provided for deferred taxes for the difference between the
book and tax basis of the net assets acquired.

The
excess of the purchase price over the fair values of assets acquired and liabilities assumed was allocated to goodwill. The amounts allocated to intangible assets were attributed to
the following categories and related useful lives:

|                                                                       |  | (Amounts in thousands)
|---------------------------------------------------------------------- |  | ----------------------
|Television programming                                                 |  | $                     
|Artist management, recording, merchandising, and sponsorship contracts |  |                       

The
results of operations of 19 Entertainment are included in the results of the Company since the date of acquisition.

18

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Pro Forma Information

The following table summarizes unaudited pro forma financial information assuming the acquisition of the Presley Business and 19 Entertainment and the related
financing transactions had occurred on January 1, 2004 and 2005. The unaudited pro forma financial information does not necessarily represent what would have occurred if the transactions had
occurred on the dates presented and should not be taken as representative of our future consolidated results of operations or financial position:

|                           |  | Three Months Ended
March 31, |       
|-------------------------- |  | ---------------------------- | ------
|
|
|Revenues                   |  | $                            | 32,220
|Net loss                   |  | $                            | (4,931
|Net loss per common share: |  |                              |       
|Basic and diluted          |  | $                            | (0.07 

Note
that the amounts for the three months ended March 31, 2005 excludes non-cash employee compensation expense associated with the exercise of employee stock options by 19
Entertainment employees prior to the Company's acquisition on March 17, 2005. This expense was $7 million after tax, or $0.10 per share.

7.    Intangible Assets and Goodwill

Intangible assets which have finite lives are being amortized on a straight-line basis over periods from 5 to 15 years. Amortization expense
for the three months ended March 31, 2005 was $1.1 million. The projected annual amortization expense for intangible assets, assuming no further acquisitions or dispositions, is
approximately $13 million for the year ending December 31, 2005 and $15.4 million for each of the following four years ending December 31.

19

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Intangible
assets consist of:

|                                                                                        |  | Gross
Carrying
Amount |         | Accumulated
Amortization |   | Net
Carrying
Amount
|--------------------------------------------------------------------------------------- |  | --------------------- | ------- | ------------------------ | - | -------------------
|
|Definite Lived Intangible Assets:                                                       |  |                       |         |                          |   |                    
|Presley record, music publishing, film and video rights                                 |  | $                     | 21,000  |                          | $ | 199                
|Presley relationships with licensees                                                    |  |                       | 12,000  |                          |   | 342                
|Priscilla Presley rights to Presley name                                                |  |                       | 5,500   |                          |   | 78                 
|19 Entertainment television programming and related rights                              |  |                       | 35,000  |                          |   | 192                
|19 Entertainment artist management, recording, merchandising, and sponsorship contracts |  |                       | 30,000  |                          |   | 230                
|                                                                                        |  |                       |         |                          |   |                    
|                                                                                        |  | $                     | 103,500 |                          | $ | 1,041              
|                                                                                        |  |                       |         |                          |   |                    
|Indefinite Lived Intangible Assets:                                                     |  |                       |         |                          |   |                    
|Trademarks, publicity rights and other intellectual property                            |  | $                     | 38,000  |                          |   |                    
|                                                                                        |  |                       |         |                          |   |                    

|                  |                         | Balance at
January 1,
2005 |   | Goodwill
Acquired
during
2005 |   | Balance at
March 31,
2005
|----------------- | ----------------------- | -------------------------- | - | ----------------------------- | - | -------------------------
|Goodwill          |                         |                            |   |                               |   |                          
|Presley Business: |                         |                            |   |                               |   |                          
|                  | Royalties and Licensing |                            | $ |                              |   | $                        
|                  | Graceland Operations    |                            |   |                              |   |                          
|19 Entertainment  |                         |                            |  |                               |   | 121,978                  
|                  |                         |                            |   |                               |   |                          
|Total Company     |                         | $                          |  |                               | $ | 148,843                  
|                  |                         |                            |   |                               |   |                          

8.    Debt

The Company has the following debt facilities at March 31, 2005:



In connection with the Presley Acquisition, the Company borrowed $39.0 million from an affiliate of Bear, Stearns & Co. Inc. This Presley
short term senior loan is an obligation of EPE Holding Corporation, our wholly owned subsidiary which directly owns 100% of our shares and interests in the Presley Business.

The
Presley short term senior loan is due and payable on February 6, 2006, although the Company is required to repay the loan immediately with the proceeds from a public offering
or private placement of any debt or equity securities, any future bank loan or comparable borrowings, and any future asset sales. The lender waived this requirement with respect to the financing for
the 19 Entertainment Acquisition. The Presley short term senior loan is also immediately due and payable upon a change in control of the Company, as defined in the Presley short term senior credit
facility.

The
Presley short term senior loan bears interest at a rate per annum equal to LIBOR (at each rate reset date) plus (a) 400 basis points through August 6, 2005,
(b) 500 basis points from August 7, 2005 through November 6, 2005 and (c) 600 basis points at all times thereafter through maturity. The interest rate on the loan as of
March 31, 2005 was 6.8%. The Company is required to repay the Presley short term

20

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senior
loan at 101% of the principal amount at maturity. This additional $390,000 of principal is being recorded as interest expense over the life of the loan.

The
Presley short term senior loan is guaranteed by the Company and secured by 100% of our ownership interests in the Presley Business and places restrictions on our ability to pay
dividends from the borrower, EPE Holding Corporation, to us, as the parent company, to fund corporate expenses and pay dividends on our Series B Convertible Preferred Stock. The loan also
requires the Company to maintain certain financial covenants including (i) a maximum debt to EBITDA ratio, (ii) minimum EBITDA, (iii) minimum tangible net worth, and
(iv) minimum cash on hand. If the Company is unable to meet these requirements or satisfy these covenants, the Company may not be able to fund all of its obligations. Under the terms of the
Presley short term senior loan, EBITDA is defined as consolidated net income plus income tax expense, interest expense, depreciation and amortization expense, extraordinary charges and
non-cash charges and minus interest income, extraordinary gains and any other non-cash income.

The
Company incurred deferred loan costs of $1.1 million to obtain this financing, which is being amortized into interest expense over the life of the loan, utilizing the
effective interest method.



In connection with the 19 Entertainment Acquisition, CKX UK Holdings Limited, a wholly owned subsidiary of the Company which directly owns 100% of 19
Entertainment borrowed $109.0 million from an affiliate of Bear, Stearns & Co. Inc.

The
19 Entertainment short term senior loan is due and payable on February 6, 2006, although the Company is required to repay the loan immediately with the proceeds from a public
offering or private placement of any debt or equity securities, any future bank loan or comparable borrowings, and any future asset sales. The 19 Entertainment short term senior loan is also
immediately due and payable upon a change in control of the Company, as defined in the 19 Entertainment short term senior credit facility.

The
19 Entertainment short term senior loan bears interest at a rate per annum equal to LIBOR (at each rate reset date) plus (a) 400 basis points through September 16,
2005, (b) 500 basis points from September 17, 2005 through December 16, 2005, and (c) 600 basis points at all times thereafter through maturity, and may be increased upon
the happening of certain events. The interest rate on the loan as of March 31, 2005 was 7.1%.

The
19 Entertainment short term senior loan is guaranteed by the Company and each of the wholly owned operating subsidiaries of 19 Entertainment and is secured by 100% of our ownership
interest in CKX UK Holdings Limited, 19 Entertainment and its subsidiaries. The 19 Entertainment short term senior loan is also secured by a second lien on our ownership interests in EPE Holding
Corporation and its subsidiaries. The credit facility places restrictions on CKX UK Holdings Limited's ability, as the borrower, to pay dividends to us, as the parent company, to fund corporate
expenses. The loan also requires us to maintain certain financial covenants including (i) a maximum debt to EBITDA ratio, (ii) minimum EBITDA, (iii) minimum tangible net worth and
(iv) minimum cash on hand. If we are unable to meet these requirements or satisfy these covenants, we may not be able to fund all of our obligations. Under the terms of the 19 Entertainment
short term senior loan, EBITDA is defined as consolidated net income plus income tax expense, interest expense, depreciation and amortization expense, extraordinary charges and non-cash
charges and minus interest income, extraordinary gains and any other non-cash income.

21

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The
Company incurred deferred loan costs of $1.9 million to obtain this financing, including a 1% commitment fee paid upon funding of the loan, which is being amortized into
interest expense over the life of the loan, utilizing the effective interest method.



The Company issued a $3.5 million subordinated promissory note to Priscilla Presley in connection with the acquisition from Priscilla Presley of all
commercial rights held by Ms. Presley to use the name "Presley" in connection with the use and exploitation of the assets acquired in the Presley Acquisition
as well as all of Ms. Presley's rights, if any, to the name "Graceland." The note bears interest at the rate of 5.385% percent per annum. The principal and interest under the note are payable
in seven consecutive equal annual installments of principal and interest of $550,000 each, due and payable on the first through the seventh anniversaries of the date of the note, with an eighth and
final installment of principal and interest in the amount of $549,858, due and payable on the eighth anniversary of the date of the note.

9.    Shareholder's Equity

On February 8, 2005, the Company granted 42,000 shares of restricted stock to the Company's independent directors. These grants were subject to adoption of
the Company's 2005 Omnibus Long-Term Incentive Compensation Plan by the shareholders of the Company, which occurred on March 25, 2005. The restricted shares vest ratably on each of
the first three anniversaries of the date of grant. The shares have been valued at $14.40, the closing stock price on the date of grant. The total value of these shares is being expensed ratably over
the three-year vesting period. Included in corporate expense on the accompanying statement of operations for the period February 8March 31, 2005 is $33,000 of
expense related to these restricted shares.

On
February 4, 2005, the Company issued 10,000 unregistered shares of common stock in satisfaction of a $270,000 obligation to a former affiliate in connection with the RFX
Investment. In addition, certain former principal shareholders purchased warrants to acquire 500,000 shares of common stock at an exercise price of $10.00 per share. The aggregate purchase price for
the warrants was $10,000 in cash.

At
March 31, 2005, the Company had outstanding warrants to purchase 4,551,597 shares of common stock at an exercise price of $2.00 per share which expire on February 7,
2007, and warrants to purchase 500,000 shares of common stock at an exercise price of $10.00 per share which expire on February 7, 2008.

The
Company is prohibited from paying cash dividends on its common stock under the terms of the Presley short term senior credit facility and the 19 Entertainment short term senior
credit facility.

10.    Income Taxes

In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon the facts and
circumstances known. The Company's effective tax rate is based on expected income, statutory tax rates and permanent differences between financial statement and tax return income applicable to the
Company in various jurisdictions in which the Company operates.

For
the three months ended March 31, 2005, the Company recorded an income tax benefit of $1.0 million which is comprised mainly of provisions for foreign taxes of
$0.5 million relating to the profitable operations of 19 Entertainment and state income tax expense of $0.1 million relating to the Presley business, net of a tax benefit of
$1.6 million on the net operating loss in the United States.

22

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Management
believes realization of the income tax benefit is reasonably assured due to the deferred tax liabilities which will reverse into taxable income in future periods.

11.    Segment Information

The Company currently has three reportable segments: Presley Business Royalties and Licensing, Graceland Operations and 19 Entertainment. All inter-segment
transactions have been eliminated in the consolidated financial statements.

|                                                          |  | Presley Business |        |  |   |        |   |   |        
|--------------------------------------------------------- |  | ---------------- | ------ |  | - | ------ | - | - | -------
|
|
|Three months ended March 31, 2005                         |  |                  |        |  |   |        |   |   |        
|Revenue                                                   |  | $                | 2,446  |  | $ | 3,352  |   | $ | 4,189  
|                                                          |  |                  |        |  |   |        |   |   |        
|Operating profit (loss)                                   |  | $                | 1,285  |  | $ | (323   | ) | $ | 1,810  
|                                                          |  |                  |        |  |   |        |   |   |        
|Three months ended March 31, 2004:                        |  |                  |        |  |   |        |   |   |        
|Revenue                                                   |  | $                |       |  | $ |       |   | $ |       
|                                                          |  |                  |        |  |   |        |   |   |        
|Operating income (loss)                                   |  | $                |       |  | $ |       |   | $ |       
|                                                          |  |                  |        |  |   |        |   |   |        
|Period January 1, 2005 to February 7, 2005 (Predecessor): |  |                  |        |  |   |        |   |   |        
|Revenue                                                   |  | $                | 1,702  |  | $ | 1,740  |   | $ |       
|                                                          |  |                  |        |  |   |        |   |   |        
|Operating profit (loss)                                   |  | $                | 1,167  |  | $ | (705   | ) | $ |       
|                                                          |  |                  |        |  |   |        |   |   |        
|Three months ended March 31, 2004 (Predecessor):          |  |                  |        |  |   |        |   |   |        
|Revenue                                                   |  | $                | 2,185  |  | $ | 5,283  |   | $ |       
|                                                          |  |                  |        |  |   |        |   |   |        
|Operating profit (loss)                                   |  | $                | 949    |  | $ | (1,069 | ) | $ |       
|                                                          |  |                  |        |  |   |        |   |   |        
|Segment assets at March 31, 2005                          |  | $                | 74,232 |  | $ | 76,341 |   | $ | 230,147
|                                                          |  |                  |        |  |   |        |   |   |        

12.    Related Party Transactions

Included in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2005 are $2.2 million of costs related to the
transition of the Company from an entity with no operations. These costs include $1.2 million of operating costs of an affiliate of RFX Acquisition LLC, primarily salaries, employee benefits,
rent and other overhead costs incurred from November 2004 through February 7, 2005, which were reimbursed by CKX upon closing of the RFX Acquisition LLC investment and the Presley
Acquisition. The remaining costs consist of legal expenses, listing fees, and due diligence expenses.

Immediately
prior to the consummation of the various transactions resulting in our acquisition of the Presley Business, the Company entered into a sublease for 16,810 square feet for its
principal corporate offices in New York, New York. The prior subtenants from whom the Company assumed the terms of the sublease were FXM, Inc. ("FXM") and MJX Asset Management LLC ("MJX").
Mr. Sillerman is the managing member of MJX and is the principal stockholder of FXM. Certain other executive officers of the Company are also investors in MJX and FXM. The terms of the
Company's sublease are identical to those which governed FXM's and MJX's occupation of such space. In accordance with certain requirements set forth in the existing sublease for the space, FXM was
required to remain as a guarantor to the Company's

23

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obligations
under the sublease. While the Company was not yet subject to the rules and regulations of The NASDAQ National Market®, the transaction was ratified by the independent members
of the board of directors of the Company in accordance with The NASDAQ National Market's® rules for affiliated transactions.

13.    Supplemental Cash Flow Information

The Company had the following non-cash investing and financing activities in the three months ended March 31, 2005 (amounts in thousands):

|Common stock issued for the acquisition of the Presley business                                    |  | $ | 3,835 
|-------------------------------------------------------------------------------------------------- |  | - | ------
|Series B Convertible Preferred stock issued for acquisition of the Presley business                |  | $ | 22,825
|Issuance of Priscilla Presley Note for the acquisition of the Presley Business                     |  | $ | 3,500 
|Common stock and redeemable restricted common stock issued for the acquisition of 19 Entertainment |  | $ | 26,341
|Conversion of Series A Convertible Redeemable Preferred Stock to common stock                      |  | $ | 17,762
|Issuance of common shares in satisfaction of obligation to former affiliate                        |  | $ | 270   
|Dividend on Series B Convertible Preferred Stock                                                   |  | $ | 264   

14.    Subsequent Events

On April 11, 2005, the Company filed a Registration Statement on Form S-1 with the Securities and Exchange Commission that contains a
preliminary prospectus relating to a proposed underwritten public offering of the Company's common stock. The Company expects to complete the offering by the end of the second calendar quarter of
2005.

24

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FORWARD LOOKING STATEMENTS

In addition to historical information, this Form 10-QSB (this "Quarterly Report") contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are those that predict or describe
future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words "believe," "expect," "will,"
"anticipate," "intend," "estimate," "project," "assume" or other similar expressions, although not all forward-looking statements contain these identifying words. All statements in this Quarterly
Report regarding our future strategy, future operations, projected financial position, estimated future revenues, projected costs, future prospects, and results that might be obtained by pursuing
management's current plans and objectives are forward-looking statements. You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known
and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak
only as of the date on which this Quarterly Report was filed with the Securities and Exchange Commission ("SEC"). We expressly disclaim any obligation to issue any updates or revisions to our
forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. Over time, our actual results, performance or achievements
will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such difference might be significant and materially
adverse to our stockholders.

25

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's discussion and analysis of financial condition and results of operations should be read in conjunction with the historical
financial statements and footnotes of the registrant, included in its Annual Report on Form 10-KSB for the year ended December 31, 2004, and of the Presley Business, included
in the Company's Current Report on Form 8-K/A filed on February 11, 2005. Our future results of operations may change materially from the historical results of operations reflected in our
historical financial statements.

We
are engaged in the ownership, development and commercial utilization of entertainment content, including the rights to the name, image and likeness of Elvis Presley, the operations of
Graceland and proprietary rights to theIDOLStelevision brand, including the American Idol series in the United States, the Pop Idol series in the
United Kingdom and local adaptations of theIDOLStelevision show format which, collectively, air in over 30 countries around the world.

On
February 7, 2005, RFX Acquisition LLC, an entity formed and controlled by Robert F.X. Sillerman, acquired a controlling interest in the Company (formerly known as Sports
Entertainment Enterprises, Inc.) which had been inactive since it sold all of its assets in August 2002. Simultaneous with that transaction, the Company acquired an 85% interest in the
Presley Business. The former owner of the Presley Business maintains a 15% interest in the business, is entitled to certain future distributions and has other contractual rights. On March 17,
2005, we acquired 100% of the outstanding capital stock of 19 Entertainment Ltd.

Presley Business

The Presley Business consists of generating revenue from the name and likeness of Elvis Presley, including physical and intellectual property owned or created by
Elvis Presley during his life. Our primary revenue sources include ticket sales and related income from public tours of Graceland, income from licensing Elvis' name and likeness for consumer products,
commercials and other uses and royalties and other income derived from intellectual property created by Elvis including records, movies, videos and music publishing. We also derive revenue from the
operation of Elvis Presley's Heartbreak Hotel and the Meadow Oaks apartment complex. Most of our revenue sources are dependant upon the public's continued interest in Elvis and the intellectual
property he created.

Revenue
from tours of Graceland has historically been seasonal with sharply higher numbers of visitors during the late spring and summer months as compared to the fall and winter
seasons.

Licensing
revenue is primarily derived from long-term contracts with terms of two to ten years. Although we seek to obtain significant minimum guarantees, our licensing
revenue varies based on the actual product sales generated by licensees.

The
intellectual property created by Elvis during his lifetime which we own has generally been assigned to third parties for commercial exploitation under long-term
agreements. Although we maintain certain controls over the use of this content and, in certain cases, have rights to terminate these agreements if the third party fails to perform, our revenue from
this intellectual property is highly dependant upon the ability of third parties to successfully market the content.

Our
significant costs to operate the Presley Business include salaries, rent and other general overhead costs. Most of our costs do not vary significantly with our revenue. Our
discretionary costs are generally in our marketing and promotions department which we primarily incur to maintain and/or increase the number of visitors to Graceland.

19 Entertainment

19 Entertainment generates revenue from the creation and production of entertainment properties. Our primary revenue sources include production and license fees
and related ratings and rankings bonuses

26

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from
television programs, and royalties from the sale of recorded music by artists signed to our record labels. We also derive revenue from the sale of merchandise, sponsorships and tours based on our
television programs and recorded music artists, and fee income from management clients.

The
majority of our revenue is derived from production and license fees and related performance bonuses from producing and licensing the IDOLStelevision show format in various countries and ancillary
revenue streams from theIDOLSbrand.
Ancillary revenue from theIDOLSbrand is generated through agreements which provide us with the option to sign finalists on the IDOLStelevision shows to
long-term recording contracts, concert tours we produce featuring IDOLSfinalists and the sale of sponsorships and merchandise involving theIDOLSbrand.

Most
of ourIDOLSrelated revenue is generated through agreements with our global television production and distribution partner,
FremantleMedia Limited, and our global record label partner, Ronagold Limited, a subsidiary of SonyBMG Music Entertainment. Therefore, we are highly dependent upon the continued ability of these
entities to successfully maintain theIDOLSbrand and promote our recording artists.

TheIDOLStelevision shows, which have aired in over 30 countries, are generally produced or licensed under one year contracts under which
each local television network has the right, but not the obligation, to renew the agreement for additional years. Our recording artists are generally signed to long-term recording
contracts under which we and SonyBMG Music Entertainment have the right, but not the obligation, to require the artist to release a specified number of albums.

Our
revenue from theIDOLSbrand is also highly dependent upon the continued success of the American Idol series which currently airs on
the Fox television network. Our revenue is also dependent upon the continued success and productivity of our other recording artists and management clients.

19 Entertainment's
revenue is seasonal in nature, reflecting the timing of ourIDOLStelevision shows in various markets.
Historically, we have generated higher revenue during the first half of the calendar year, which corresponds to the dates our American Idol series airs on the Fox television network in the United
States. A significant portion of our revenue from American Idol is paid to us in the second half of the calendar year.

Our
significant costs to operate 19 Entertainment include salaries and other compensation, rents and general overhead costs. Our discretionary costs include salary and overhead
costs incurred in the development of new television projects and investments made in trying to establish successful recording careers for artists who have appeared as finalists on the IDOLStelevision
series.

Film
and television revenues continue to be largely derived from the Idol franchise and represent contractual payments for each broadcast, ratings-based bonuses and a share of American
Idol program sponsorship fees. Music revenues are earned primarily from royalties on music sales deriving from the ownership of master recordings (as well as a small element of income from musical
copyrights). Touring revenues result primarily from the production of tours featuring both Idols finalists and managed artists. Sponsorship and merchandising revenues are fees earned from crafting
relationships with key brands and 19 Entertainment properties as well as the optioning of merchandising rights for the top contestants on Idols television shows and other recording artists.
Management revenues represent fees earned for artist management, which are typically a percentage of artists' earnings.

27

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Combined Operating Results Quarter Ended March 31, 2005 Compared to Predecessor Quarter Ended March 31, 2004

Prior to the acquisition of the Presley Business on February 7, 2005, the Company had no operations. As a result the Presley Business is considered to be
the predecessor company. To assist in the understanding of the results of operations of the Company, we have presented supplemental historical results of the Predecessor. For the purpose of
management's discussion and analysis of financial condition and results of operations, we have combined the Company's results for the three months ended March 31, 2005 with that of the
Predecessor for the period January 1, 2005 to February 7, 2005 and compared that to the results of the Predecessor for the three months ended March 31, 2004. Management believes
that this provides the most meaningful analysis of the Company's results for the three months ended March 31, 2005.

CKX
Three Months
Ended
March 31, 2005

Predecessor
Presley
January 1, 2005
To
February 7, 2005

Combined
Total

Predecessor
Presley
Three Months
Ended
March 31, 2004

Variance(amounts in thousands)Revenue

$
9,987

$
3,442

$
13,429

$
7,468

$
5,961Operating expenses


11,449


2,980


14,429


7,615


6,814Operating income (loss)


(1,462
)

462


(1,000
)

(147
)

(853
)Interest expense, net


958


115


1,073


444


629Income (loss) before other income


(2,420
)

347


(2,073
)

(591
)

(1,482
)Other income


700





700





700Income (loss) before income taxes


(1,720
)

347


(1,373
)

(591
)

(782
)Income tax expense (benefit)


(990
)

152


(838
)

16


(854
)Income (loss) before minority interest


(730
)

195


(535
)

(607
)

(72
)Minority interest


194





194





194Net income (loss)

$
(924
)
$
195

$
(729
)
$
(607
)
$
(122
)


The
combined total column has been prepared on a different basis of accounting than for the Predecessor for the period ended March 31, 2004. The combined total includes the impact
of additional depreciation and amortization expense resulting from the fair value accounting of acquired assets for both the Presley Business and 19 Entertainment. This added approximately
$1.1 million to operating expenses. In addition, the combined total includes interest expense related to the Presley and 19 Entertainment short term senior credit facilities and the
Priscilla Presley Note of approximately $1.0 million.

On
a combined basis, revenues earned were $13.4 million for the combined total period as compared to $7.5 million for the Predecessor for the three months ended
March 31, 2004. The increase of $6.0 million is primarily attributable to the revenue of 19 Entertainment of $4.1 million for the period since its acquisition. The
remaining increase in revenue was due to higher licensing and royalty fees at the Presley Business, including licensing fees related to a television mini-series.

Combined
operating expenses increased by $6.8 million. Of this increase, $2.1 million represents corporate overhead costs and $2.2 million represents costs related
to the transition of the Company including the RFX Investment and the Presley Acquisition. Included in the $2.2 million of other costs are $1.2 million of operating costs of an affiliate
of RFX Acquisition LLC, primarily salaries, employee benefits, rent and other overhead costs incurred from November 2004 through February 7, 2005, which were reimbursed by the Company
upon closing of the RFX Acquisition LLC investment and the Presley Acquisition. The remaining costs consist of legal expenses, listing fees, and due diligence expenses. The operating expenses of
19 Entertainment for the period subsequent to its acquisition were $2.3 million.

28

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Interest
expense increased by $0.6 million due to the interest costs associated with borrowings incurred to acquire the Presley Business and 19 Entertainment.

Other
income of $0.7 million relates to foreign exchange gains.

We
recognized a net income tax benefit of $0.8 million for the combined period. This net benefit reflects foreign tax income tax expense related to the profitable operations of
the 19 Entertainment business, state income tax expense related to the Presley business and a federal income tax benefit related to the overall loss incurred. Management believes realization of
the income tax benefit is reasonably assured due to the deferred tax liabilities which will reverse into taxable income in future periods. The Predecessor business was partly held in a trust structure
and therefore the net income was not taxed in the business, resulting in a low effective tax rate.

The
minority interest expense of $0.2 million reflects a 15% share in the net income of the Presley Business related to the equity interest retained by the former owner.



As a result of our acquisition of an 85% interest in the Presley Business and our acquisition of 19 Entertainment, we have made changes to our historical
capital and financial structure. The following highlights the most significant changes:

Acquisition by RFX Acquisition LLCOn February 7, 2005, RFX Acquisition LLC contributed $3,046,407 in cash to our
Company in exchange for 30,464,072 newly issued shares of common stock and warrants to purchase (i) 6,828,938 shares of common stock at $1.00 per share, (ii) 6,828,938 shares of common
stock at $1.50 per share, and (iii) 6,828,939 shares of common stock at $2.00 per share. Simultaneously with this exchange, RFX Acquisition LLC also acquired an aggregate of 2,240,397 shares of
common stock directly from certain former principal stockholders at a price of $0.10 per share. Immediately following the consummation of its investment in our company, RFX Acquisition LLC distributed
all of its shares of common stock and its warrants to its members, including our Chief Executive Officer, Mr. Sillerman, and certain members of our Company's senior management. In order to
provide additional capital to our Company on February 7, 2005, certain recipients of the warrants, including Mr. Sillerman, and other members of our Company's senior management,
exercised an aggregate of five million of the $1.00 warrants for aggregate consideration to our Company of $5,000,000.

Distributions to Minority Shareholders of SubsidiariesUnder the terms of our agreement to acquire an 85% interest in the
Presley Business, we are required to make future minimum annual distributions, in monthly installments, to The Promenade Trust which are intended to represent its 15% share of the operating income of
the Presley Business before depreciation and amortization and after income taxes and capital expenditures. We have agreed that during the first year we operate the Presley Business we will make a
monthly distribution of $125,000 to The Promenade Trust. At the end of each calendar year, we will make a calculation of the actual amount due to The Promenade Trust based on its 15% ownership
interest and make an additional distribution to The Promenade Trust if its actual 15% share is higher than the total distributions paid to The Promenade Trust over the prior twelve months. If the
calculation indicates that we have paid more than The Promenade Trust was entitled to,
we will reduce future monthly distributions to The Promenade Trust by such amount. However, we will always be required to pay The Promenade Trust a minimum annual distribution of $1.2 million
for each full calendar year irrespective of the actual operating results for the business in such year.

Series B Convertible Preferred StockEach share of Series B Convertible Preferred Stock has a stated value of
$15.30 and entitles the holder to receive an annual dividend calculated at a rate of 8% of the stated value. The shares of Series B Convertible Preferred Stock are convertible by the holder
into common stock at any time at a conversion price equal to the stated value, subject to adjustments in connection with standard anti-dilution protections for stock splits, stock
dividends and reorganizations.

29

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The
shares of Series B Convertible Preferred Stock become convertible at our option from and after the third anniversary of the date of issuance, if, at any time, the average closing price of
the common stock over a thirty day trading period equals or exceeds 150% of the conversion price.

During
the period August 7, 2011 and ending August 7, 2013, we can redeem the outstanding shares of Series B Convertible Preferred Stock, in whole or in part, for an
aggregate price equal to the stated value plus accrued but unpaid dividends through the date of redemption. If we do not exercise this redemption right, the conversion price for all remaining shares
of Series B Convertible Preferred Stock is thereafter reduced to the lower of (i) the conversion price then in effect and (ii) the average closing price of the common stock over a
thirty day trading period measured as of the last day of the redemption period.

The
Promenade Trust has the right to require us to purchase for cash all or a portion of its 15% ownership interest in the Presley Business from time to time beginning on
January 1, 2008. The price we will be required to pay to The Promenade Trust will be based on the then current fair market value of the Presley Business as determined through an appraisal
process.

Priscilla Presley TransactionIn connection with the acquisition of our 85% interest in the Presley Business, we acquired from
Priscilla Presley all commercial rights held by Ms. Presley to use the name "Presley" in connection with the use and exploitation of the assets acquired from The Promenade Trust as well as all
of Ms. Presley's rights, if any, to the name "Graceland". The purchase price for the rights acquired from Priscilla Presley was $6.5 million, with $3.0 million paid in cash at the
closing and $3.5 million paid in the form of an eight year subordinated promissory note. The promissory note bears interest at a rate of 5.385% per year and requires annual payments of
$550,000.

The Huff Alternative Fund, L.P. InvestmentSimultaneous with the closing of the investment in our Company by RFX Acquisition
LLC and our acquisition of the Presley Business, The Huff Alternative Fund, L.P. and its affiliate contributed an aggregate of $43.8 million in cash in exchange for: (i) 2,172,400 shares
of Series A Convertible Redeemable Preferred Stock, (ii) 3,706,052
newly issued shares of common stock, (iii) warrants to purchase 1,860,660 shares of common stock at $1.00 per share, (iv) warrants to purchase 1,860,660 shares of common stock at $1.50
per share, and (v) warrants to purchase 1,860,661 shares of common stock at $2.00 per share.

The
allocation of the proceeds from the investment by The Huff Alternative Fund, L.P. and its affiliate between the fair value of the Series A Convertible Redeemable Preferred
Stock and the fair value of the detachable warrants resulted in a beneficial conversion feature in the amount of $17.8 million.

Series A Convertible Redeemable Preferred StockOn March 21, 2005, The Huff Alternative Fund, L.P. and its
affiliate exercised their rights to convert all of their 2,172,400 shares of Series A Convertible Redeemable Preferred Stock into 6,051,253 shares of common stock. Following such conversion,
there are currently no shares of Series A Convertible Redeemable Preferred Stock outstanding. The terms of the Series A Convertible Redeemable Preferred Stock at issuance and prior to
the conversion into common stock are described below.

At
issuance, each share of Series A Convertible Redeemable Preferred Stock had a stated value of $20.00 per share and was convertible into common stock at a conversion price as
more fully described below. Holders of the Series A Convertible Redeemable Preferred Stock were not entitled to any dividends beyond participating on an as converted basis in dividends declared
with respect to the common stock. The shares of Series A Convertible Redeemable Preferred Stock were convertible into common stock at any time at the option of the holder. The shares of
Series A Convertible Redeemable Preferred Stock were to become convertible at the Company's option if, at any time following the third anniversary of issuance the average closing price of the
common stock over a thirty day trading period equaled or exceeded $15.00. In addition, if at any time after issuance (i) the total market capitalization of the outstanding shares of common
stock equaled or exceeded $500 million, and (ii) the average closing price of the common stock over a period of thirty consecutive trading days equaled or exceeded $15.00, the Company
would have had

30

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the
right to convert such number of shares of Series A Convertible Redeemable Preferred Stock with an aggregate stated value of up to 25% of the market value of all publicly traded common stock
(excluding shares held by affiliates of the Company). The Company could not force conversion of any shares of Series A Convertible Redeemable Preferred Stock during the lockup period described
below.

The
holders of the Series A Convertible Redeemable Preferred Stock had certain anti-dilution protection with respect to the Series A Convertible Redeemable
Preferred Stock. The conversion price of the Series A Convertible Redeemable Preferred Stock, which was $10.00 per share at issuance, was subject to adjustment upon (i) issuances of
common stock at a price below $10.00 per share, and (ii) the exercise or conversion of convertible stock, warrants, options (other than employee incentive stock options) or other similar
derivatives relating to common stock, in each case at a price below $10.00 per share.

The
terms of the Series A Convertible Redeemable Preferred Stock specifically provided for an adjustment for the issuance of the 15,486,815 warrants issued but not exercised by
the recipients thereof immediately following the closing of the Presley Acquisition, but no adjustment in connection with the issuance and exercise of the warrants received by the Huff Alternative
Fund LP or the Huff Alternative Parallel Fund LP at closing or for the 5,000,000 warrants which were issued and exercised immediately following closing. After giving effect to the adjustments
described in the preceding sentence, the conversion price of the Series A Convertible Redeemable Preferred Stock became $7.18 per share of common stock, so that each share of Series A
Convertible Redeemable Preferred Stock was convertible into approximately 2.8 shares of common stock.

During
the first three years following issuance, the Company had the option to redeem part or all of the Series A Convertible Redeemable Preferred Stock using up to 25% of the
proceeds from each registered public offering or private investment in public equity ("PIPES") transaction: (i) during the first twelve months following issuance, at a price of $23.10 per
share, and (ii) at all times thereafter, at a price that would have provided the holders of the Series A Convertible Redeemable Preferred Stock with an internal rate of return of 15.5%
on the shares of Series A Convertible Redeemable Preferred Stock being sold. Upon a liquidation, the holders of the Series A Convertible Redeemable Preferred Stock were entitled to
receive in preference to the holders of any other class or series of the Company's equity securities (other than the Series B Convertible Preferred Stock) a cash amount per share equal to the
greater of the stated value plus any accrued but unpaid dividends or the amount to which they would be entitled had they converted to common stock.

If,
after six years following issuance, the aggregate return to the holders of the Series A Convertible Redeemable Preferred Stock did not equal or exceed 8%, then the holders of
the Series A Convertible Redeemable Preferred Stock would have been entitled to receive a distribution of cash or additional shares of Series A Convertible Redeemable Preferred Stock so
that the return calculated to such date equaled 8% (the "Total Return Amount").

In
the event that any holder of Series A Convertible Redeemable Preferred Stock had not converted its shares as of the eighth anniversary of the date of issuance, the Company
would have been required to redeem 100% of the outstanding shares of Series A Convertible Redeemable Preferred Stock for an aggregate price equal to the stated value multiplied by the number of
shares of Series A Convertible Redeemable Preferred Stock then being redeemed plus any Total Return Amount owed but not paid in accordance with the preceding paragraph.

As
a result of the redemption right described above, the Series A Convertible Redeemable Preferred Stock was initially recorded as temporary equity. Following the March 21,
2005 conversion into common stock, the Series A Convertible Redeemable Preferred Stock was reclassified as permanent equity.

The
allocation of the proceeds from the Huff Investment resulted in a beneficial conversion feature for the Series A Convertible Redeemable Preferred Stock in the amount of
$17.8 million, which reduced the carrying value of the Series A Convertible Redeemable Preferred Stock by that amount. This was due in part to the allocation of proceeds raised to the
warrants as well as the conversion ratio of one share of

31

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preferred
stock into 2.8 shares of common stock as previously described. This beneficial conversion feature was to be accreted over the eight-year redemption period and recorded as
a preferred dividend. As a result of the conversion described above, a dividend equal to the amount of the unaccreted beneficial conversion feature of $17.8 million was recognized at that time.

The Presley Short Term Senior LoanA portion of the cash consideration for our acquisition of the Presley Business was
obtained through a $39.0 million short term senior loan from an affiliate of Bear, Stearns & Co. Inc., one of the underwriters of this offering. The borrower under the Presley
short term senior loan is EPE Holding Corporation, our wholly owned subsidiary, which directly owns 100% of our company's interests in the Presley Business. The principal amount of the loan is
guaranteed by us and secured by our ownership interest in the Presley Business. Full payment on the principal amount is due on February 6, 2006, although we are required to repay the loan with
the proceeds from a public offering or private placement of any debt or equity securities, any future bank loan or comparable borrowings, and any future asset sales. At maturity, we must repay the
loan at 101% of the principal amount.

The 19 Entertainment Short Term Senior LoanA portion of the cash consideration for our acquisition of
19 Entertainment was obtained through a $109.0 million short term senior loan from an affiliate of Bear Stearns & Co. Inc. The borrower under the 19 Entertainment
short term senior loan is CKX UK Holdings Limited, our wholly owned subsidiary, which directly owns 100% of 19 Entertainment. We were required to pay a 1% commitment fee upon the funding of the
loan. This additional $1,090,000 of principal will be recorded as interest expense over the life of the loan. The loan is guaranteed by the Company, 19 Entertainment and each of the material
subsidiaries of 19 Entertainment and is secured by 100% of our beneficial ownership interest in CKX UK Holdings Limited, 19 Entertainment and its subsidiaries. The loan is also secured
by a second lien on our ownership interests in EPE Holding Corporation and its subsidiaries. Full payment on the principal amount is due on February 6, 2006, although we are required to repay
the loan with the proceeds from a public offering or private placement of any debt or equity securities, any future bank loan or comparable borrowings, and any future asset sales.

ReincorporationOn March 25, 2005, we merged into our wholly-owned subsidiary, changing, among other things,
(i) the name of our company from Sports Entertainment Enterprises, Inc. to CKX, Inc., (ii) our state of incorporation from Colorado to Delaware, and (iii) our
capital stock from no par value to $0.01 par value per share.



Net cash provided by operating activities was $.2 million in the quarter ended March 31, 2005 as the net loss of $.9 million was offset by
depreciation and amortization expenses of $1.3 million.



Net cash used in investing activities was $204.5 million in the quarter ended March 31, 2005. Cash paid for acquisitions and related costs was
$204.3 million. Capital expenditures were $0.2 million.



Cash provided by financing activities was $221.7 million, reflecting $145.3 million net proceeds from the short-term senior credit
facilities, $43.3 million net proceeds from the Huff investment, $30.0 million proceeds from warrant exercises and $3.1 million from the issuance of common stock.



At March 31, 2005, we had $148.4 million of debt outstanding under two loan agreements, the Presley short term senior loan and the
19 Entertainment short term senior loan. We also had $3.5 million of debt

32

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outstanding
under the Priscilla Presley note and $17.6 million in cash and cash equivalents. If we successfully complete our proposed public equity offering, we intend to use a portion of the
net proceeds to repay all amounts outstanding under the short-term senior loans. However, if we do not consummate the offering, we will be unable to repay the Presley and
19 Entertainment short term senior loans prior to maturity in February 2006 unless we can successfully obtain alternative financing arrangements or renegotiate the repayment terms of the
loans. Our ability to successfully obtain an alternative financing arrangement or renegotiate the payment terms of the loans, to repay the Presley and 19 Entertainment short term senior loans
will be dependent upon a number of factors including the future financial performance of our business and general conditions in the capital markets. In the future, we may seek to obtain a new credit
facility or seek to issue debt securities.

We
believe that our current cash on hand together with cash flow from operations will be sufficient to fund our current operations, including payments of interest due under the Presley
and 19 Entertainment short term senior loans, dividends on our Series B Convertible Preferred Stock, mandatory minimum distributions to the minority shareholder in the Presley Business
and capital expenditures until at least the due date of the Presley and 19 Entertainment loans on February 6, 2006.



We have not completed our 2005 capital expenditures budget. We presently anticipate that our capital expenditures in 2005 will include ongoing improvements at the
Presley Business and 19 Entertainment with total costs reasonably similar to those incurred by the businesses in recent years. We also expect to incur additional capital expenditures at the
corporate level to implement new information technology and financial systems; we have not determined the amounts of such expenditures.



We intend to acquire additional businesses that fit our strategic goals. We expect to finance our future acquisitions of entertainment related businesses from new
credit facilities, additional debt and equity offerings, issuance of our equity directly to sellers of businesses and cash flow from operations.

We
are highly leveraged and have not previously issued significant amounts of equity or debt to the public markets. Therefore, no assurance can be given that we will be able to obtain
adequate financing to complete any potential future acquisitions we might identify.



Our Series B Convertible Preferred Stock requires payment of a cash dividend of 8% per annum in quarterly installments. On an annual basis, our total
dividend payment on the Series B Convertible Preferred Stock will be $1.8 million. If we fail to make our quarterly dividend payments to the holders of the Series B Convertible
Preferred Stock on a timely basis, the dividend rate increases to 12% and all amounts owing must be paid within three business days in shares of common stock valued at the average closing price over
the previous 30 consecutive trading days. After such payment is made, the dividend rate returns to 8%.

We
are prohibited under the terms of certain of our financing arrangements from, and have no intention of, paying any dividends on our common stock for the foreseeable future.



There are various lawsuits and claims pending against us and which we have initiated against others. We believe that any ultimate liability resulting from these
actions or claims will not have a material adverse effect on our results of operations, financial condition or liquidity.

33

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In
addition to our scheduled maturities of debt, obligations to redeem preferred stock and obligations to the seller of the Presley Business and to the seller of 19 Entertainment,
we have future cash obligations under various types of contracts. We lease office space and equipment under long-term operating leases. We have also entered into long-term
employment agreements with certain of our executives and other key employees. These contracts typically contain provisions that allow us to terminate the contract with good cause.



Inflation has affected the historical performances of the businesses primarily in terms of higher operating costs for salaries and other administrative expenses.
Although the exact impact of inflation in indeterminable, we believe that the Presley Business has offset these higher costs by increasing prices at Graceland and for intellectual property licenses
and that 19 Entertainment has offset these higher costs by increasing fees charged for its production services and higher royalty and sponsorship rates.



The preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) requires
management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of
expenses that are not readily available from other sources. Actual results may differ from these estimates under different assumptions. The following accounting policies require significant management
judgments and estimates.



A
portion of our revenue is derived from licensing rights to third parties to sell merchandise based on intellectual property, including name, image and likeness rights and related
marks. Revenue from these activities is recognized when all of the following conditions are met: (i) pervasive evidence of an arrangement exists; (ii) delivery has occurred or services
have been rendered; (iii) the price to the licensee or buyer is fixed or determinable; and (iv) collectibility is reasonably assured. Licensing advances are deferred until earned under
the licensing agreement. Licensing contracts normally provide for quarterly reporting from the licensee of sales made and royalties due. Guaranteed minimum royalties are recognized ratably over the
term of the license or are based on sales of the related products, if greater.



Income
from music and film contracts are derived from the sale of records and DVDs or from the licensing of film/music rights to third parties. Revenue from recordings are recognized in
accordance with Statement of Financial Accounting Standards ("SFAS") 50, Financial Reporting in the Record and Music Industry ("SFAS 50"). Under SFAS 50, revenue is recognized when we: (i) have
signed a non-cancelable contract; (ii) have delivered the rights to the licensee who is free to exercise them; (iii) have no remaining significant obligations to furnish
music or records; and (iv) when collectibility of the full fee is reasonably assured. A significant portion of our royalty income is paid to us based on the timetable associated with royalty
statements generated by third party processors, and is not typically known by us on a timely basis. This revenue is consequently recognized on a cash basis if the amount of accrual is not known or
reasonably estimable until receipt of the statements from the third parties. We contract with various agencies to facilitate collection of royalty income. When the company is entitled to royalties
based on gross

34

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receipts,
revenue is recognized before deduction of agency fees, which are included in our financial statements as a component of cost of sales.



We
recognize revenues for television and film productions pursuant to American Institute of Certified Public Accountants Statement of Position 00-2, Accounting by
Producers or Distributors
of Films ("SOP 00-2"). The following conditions must be met in order to recognize revenue under SOP 00-2: (i) persuasive evidence of a sale or licensing
arrangement exists; (ii) the program is complete and has been delivered or is available for immediate and unconditional delivery; (iii) the license period of the arrangement has begun
and the customer can begin its exploitation, exhibition or sale; (iv) the arrangement fee is fixed or determinable; and (v) collection of the arrangement fee is reasonably assured.
Advance payments received from buyers or licensees are included in our financial statements as a component of deferred revenue.



We
derive revenue from sponsorships associated with certain of our television productions and tours. Sponsorship fees relate to either (i) a one time event, or (ii) a
period of time. Revenues from a one time event are recognized once: (i) pervasive evidence of an arrangement exists; (ii) the event has occurred; (iii) the price is fixed or
determinable; and (iv) collectibility is reasonably assured. Non-refundable advance payments associated with sponsorships over a period of time are recognized on a straight line
basis over the term of the contract from the later of the point at which: (i) pervasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered;
(iii) the price is fixed or determinable; and (iv) collectibility is reasonably assured, or, the beginning of the license period. Sponsorship advances are deferred until earned pursuant
to the sponsorship agreement.



Ticket
sales for tours and exhibits, as well as merchandise sales and food and beverage sales are recognized at point of sale. Advance ticket sales are recorded as deferred revenue
pending the "event date" on the ticket.



The cost of producing television and film programs is capitalized and recognized as expense in accordance with the individual film forecast method specified in
SOP 00-2, pursuant to which the Company estimates the ratio that revenue which is earned for such programming in the current period bears to its estimate at the beginning of the
current year of total revenues to be realized from all media and markets for such programming. Amortization commences in the period in which revenue recognition commences. Management regularly reviews
and revises its total revenue estimates
for each project, which may result in modifications to the rate of amortization. If a net loss is projected for a particular project, the related capitalized costs are written down to estimated
realizable value.

The
Company also accounts for its film and television projects in development pursuant to SOP 00-2. Third party costs incurred in producing television programs and
films for which the Company has secured distribution agreements are capitalized and remain unamortized until the project is distributed or are written off at the time they are determined not to be
recoverable. Third party costs incurred in developing concepts for new television programs and films are expensed as incurred until such time as the Company has secured distribution agreements.

35

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Recoupable recording costs and artist advances, as adjusted for anticipated returns, are recognized in accordance with SFAS No. 50, "Financial Reporting in
the Record and Music Industry" and thus are charged to expense in the period in which the sale of the record takes place. Recoupable recording costs and artist advances are only capitalized if the
past performance and current popularity of the artist for whom the recording costs are incurred or to whom the advance is made provide a sound basis for estimating that the amount capitalized will be
recoverable from future royalties to be earned by the artist. Any portion of recoupable recording costs or artists advances that subsequently appear not to be fully recoverable from future royalties
to be earned by the artist are charged to expense during the period in which the loss becomes evident.



The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ materially from those estimates.



In December 2004, the FASB issued a revision to SFAS No. 123,Accounting for Stock-Based
Compensation. This revision will require us to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date
fair value of the award. The cost will be recognized over the period during which an employee is required to provide service in exchange for the award. This revised Statement is effective as of the
beginning of the first annual reporting period that begins after June 15, 2005. This revised Statement will apply to all awards granted after the required effective date and to awards modified,
repurchased or canceled after that date. As of the required effective date, we will apply this revised Statement using a modified version of prospective application. Under that transition method,
compensation cost is recognized on or after the
required effective date for the portion of outstanding awards for which the requisite service has not yet been rendered, based on the grant-date fair value of those awards calculated under
SFAS No. 123 for either recognition or pro forma disclosures. We adopted SFAS No. 123R effective January 1, 2005.

In
December 2004, the FASB issued SFAS No. 153,Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29.
This statement amends APB No. 29,Accounting for Nonmonetary Transactions, to eliminate the exception for nonmonetary exchanges of similar
productive assets under APB No. 29 and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. The statement is effective for financial
statements for fiscal years beginning after June 15, 2005. The adoption of the statement is not expected to have a material effect on the Company's consolidated financial position, results of
operations and cash flows.



As of March 31, 2005, we did not have any off balance sheet arrangements as defined in Item 303 (a)(4)(ii) of SEC
Regulation S-K.

Item 3.    Quantitative And Qualitative Disclosure About Market Risk

We are exposed to market risk arising from changes in market rates and prices, including movements in foreign currency exchange rates and interest rates. To
mitigate these risks, we may utilize derivative financial instruments, among other strategies. We do not use derivative financial instruments for speculative purposes.

36

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We had $151.9 million of total debt outstanding at March 31, 2005, of which $148.4 million was variable rate debt. As such, we are exposed to
changes in interest rates. We have no current programs in place
to reduce this exposure. Based on our current amount of outstanding variable rated debt outstanding, each 1% increase or decrease in interest rates would increase or decrease our annual interest
expense by $148,000.



As a result of our acquisition of 19 Entertainment, we have significant operations outside the United States, principally in the United Kingdom. Our foreign
operations are measured in local currencies. In addition, certain of our entertainment properties, including theIDOLSbrand and our rights to the name,
image and likeness of Elvis Presley, generate revenue in various countries throughout the world. As a result, our financial results could be affected by factors such as changes in foreign currency
exchange rates or weak economic conditions in foreign markets in which we operate.

Historically,
19 Entertainment, as a U.K. based enterprise, entered into foreign currency option contracts to hedge it exposure to certain U.S. dollar denominated revenue. Due to the
recent timing of our acquisitions, we are currently evaluating what strategies, if any, we should adopt to minimize our exposure to foreign currencies.

Item 4.    Controls and Procedures

In connection with the audit of the financial statements of the Presley Business for the year ended December 31, 2004, Deloitte & Touche LLP, our
independent registered public accounting firm, has identified certain material weaknesses in internal controls. A material weakness is a reportable condition under standards established by the
American Institute of Certified Public Accountants in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that
misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. The material weaknesses identified at the Presley Business include deficiencies in the number of accounting staff, the financial closing and
reporting process, accounting for licensing arrangements and inventory management.

Prior
to our acquisition on February 7, 2005, the Presley Business was a privately owned company and therefore was not required to maintain the same level of internal controls as
a publicly traded company in the United States. Since acquiring the Presley Business, we have been working to address the material weaknesses identified. Actions taken to date include hiring a new
Vice President of Finance and other accounting staff, engaging an outside consultant to review the control environment and
upgrading systems and controls at the Presley Business. The Company expects to have corrected all material weaknesses no later than December 31, 2005.

The
Company intends to make future acquisitions of privately owned businesses. We believe that it is likely that certain of these acquisitions may have material weaknesses or other
deficiencies in internal controls. In the event that we make future acquisitions of companies with material weaknesses in internal controls, we intend to take corrective actions similar to those being
implemented at the Presley Business.

37

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Part IIOther Information

Item 4.    Submission of Matters to a Vote of Security Holders

Five proposals were submitted to a vote of, and approved by, the shareholders of the Company at a Special Meeting of Shareholders held on March 25, 2005.
The first proposal was to amend the Company's Articles of Incorporation to change the Company's name from Sports Entertainment Enterprises, Inc. to CKX, Inc. The second proposal was to
increase the authorized number of the Company's shares of capital stock and to change the par value of the Company's capital stock from no par value to $0.01 par value per share. The third proposal
was to approve a change in the Company's state of incorporation from Colorado to Delaware through a merger of the Company into its wholly owned Delaware subsidiary. The fourth proposal was to approve
the Company's 2005 Omnibus Long-Term Incentive Compensation Plan and the fifth proposal was to approve the issuance of certain shares of the Company's common stock that may be issued upon
conversion of the Company's outstanding Series A Convertible Redeemable Preferred Stock and Series B Convertible Preferred Stock. Additional information about the proposals can be found
in the Company's Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on March 15, 2005.

Of
the shares outstanding and entitled to vote, 38,017,307 shares of the Company's common stock, 2,172,400 shares of the Company's Series A Convertible Redeemable Preferred stock
and 1,491,817 shares of the Company's Series B Convertible Preferred Stock were represented in person or by proxy
at the Special Meeting, which constitutes approximately 88.4% of the total votes entitled to be cast at such meeting. Each holder of the Company's Series A Convertible Redeemable Preferred
Stock is entitled to the number of votes equal to the largest number of whole shares of common stock into which such holder's shares of Series A Convertible Redeemable Preferred Stock could be
converted at the record date.

The
votes for each proposal were cast as follows:

For

Against

Abstain1. Name Change Proposal

48,413,258

1

12. Capitalization Proposal

48,413,257

2

13. Reincorporation Proposal

48,413,234

0

264. Incentive Plan Proposal

48,413,157

77

265. Stock Issuance Proposal

48,413,233

1

26


38

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Item 5.    Other Information.

(a)    On
April 11, 2005, the Company filed a Registration Statement on Form S-1 with the Securities and Exchange Commission that contains a preliminary prospectus
relating to a proposed underwritten public offering of the Company's common stock. The Company expects to complete the offering by the end of the second calendar quarter of 2005.

(b)    In
connection with the RFX Investment, the Company adopted new Colorado Bylaws on February 8, 2005 that contained notice provisions for stockholder nominations of directors,
replacing its Colorado Bylaws that did not contain such a provision. A copy of the new Colorado Bylaws was filed as an exhibit to the Current Report on Form 8-K/A, filed
February 11, 2005.

At
the Special Meeting of the Company's stockholders held on March 25, 2005, the shareholders voted to approve the reincorporation of the Company from Colorado to Delaware,
resulting in the adoption of new Bylaws of the Company, a copy of which was filed as Exhibit 3.2 to the Current Report on Form 8-K, dated and filed on March 25, 2005.
Delaware corporate law, like Colorado corporate law, does not specify the manner in which nominations for directors may be made by stockholders. The Company's new Delaware Bylaws have notice
provisions for stockholder nominations of directors similar to those in the Colorado Bylaws that they replaced. A stockholder must give timely notice in proper written form to the Secretary of the
Company of his or her intention to nominate a person for election as a director of the Company.

Item 6. Exhibits and Reports on Form 8-K

|Exhibit
No. |  | Description                                                                                                                                                                                                                              
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Certificate of Incorporation (Previously filed as Exhibit 3.1 to the Form 10-KSB filed March 31, 2005, and incorporated herein by reference).                                                                                            
|3.2         |  | Form of Amended and Restated By-Laws (Previously filed as Exhibit 3.2 to the Form 10-KSB filed March 31, 2005, and incorporated herein by reference).                                                                                    
|4.1         |  | Form of Bear, Stearns & Co. Inc. Bridge Note for 19 Entertainment short term senior loan (Filed herewith).                                                                                                                               
|4.2         |  | Registration Rights Agreement, dated March 17, 2005, by and among the Company, Simon Robert Fuller and Fuller Nominees Limited (Filed herewith).                                                                                         
|4.3         |  | Registration Rights Agreement, dated February 7, 2005 between the Company and The Huff Alternative Fund, L.P. (Previously filed as Exhibit 4.4 to the Form 8-K/A filed February 11, 2005, and incorporated herein by
reference).         
|4.4         |  | Registration Rights Agreement, dated February 7, 2005 between the Company and The Promenade Trust (Previously filed as Exhibit 4.5 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                     
|4.5         |  | Form of Common Stock Purchase Warrant, dated as of February 7, 2005, to purchase shares of common stock of the Company (Previously filed as Exhibit 4.6 to the Form 8-K/A filed February 11, 2005, and incorporated herein by
reference).
|4.6         |  | Form of Bear, Stearns & Co. Inc. Note for Presley short term senior loan (Previously filed as Exhibit 4.7 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                                              
|            |  |                                                                                                                                                                                                                                          

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|4.7   |  | Form of Promissory Term Note made on February 7, 2005, payable to Priscilla Presley (Previously filed as Exhibit 4.8 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                                                                                                                                              
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1  |  | Contribution and Exchange Agreement dated as of December 15, 2004 between the Company, The Promenade Trust and RFX Acquisition LLC (Previously filed as Exhibit 10.1 to the Form 8-K/A filed February 11, 2005, and incorporated
herein by reference).                                                                                              
|10.2  |  | Amendment to the Contribution and Exchange Agreement dated as of February 7, 2005 between the Company, The Promenade Trust and RFX Acquisition LLC (Previously filed as Exhibit 10.2 to the Form 8-K/A filed February 11, 2005, and
incorporated herein by reference).                                                                              
|10.3  |  | Purchase Agreement, dated as of December 15, 2004, by and among the Company, Ronald S. Boreta, Vaso Boreta, John Boreta, Boreta Enterprises Ltd., ASI Group LLC and RFX Acquisition LLC (Previously filed as Exhibit 10.3 to the
Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                                         
|10.4  |  | Amendment to Purchase Agreement, dated as of February 7, 2005, by and among the Company, Ronald S. Boreta, Vaso Boreta, John Boreta, Boreta Enterprises Ltd., ASI Group LLC and RFX Acquisition LLC (Previously filed as Exhibit 10.4 to
the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                             
|10.5  |  | Stock Purchase Agreement, dated as of December 15, 2004, by and among Ronald S. Boreta, Vaso Boreta, John Boreta, Boreta Enterprises Ltd., ASI Group LLC and RFX Acquisition LLC (Previously filed as Exhibit 10.5 to the Form 8-K/A
filed February 11, 2005, and incorporated herein by reference).                                                
|10.6  |  | Amendment to Stock Purchase Agreement, dated as of February 7, 2005, by and among Ronald S. Boreta, Vaso Boreta, John Boreta, Boreta Enterprises Ltd., ASI Group LLC and RFX Acquisition LLC (Previously filed as Exhibit 10.6 to the
Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                                    
|10.7  |  | Stock Purchase Agreement dated as of February 7, 2005, by and between the Company and The Huff Alternative Fund, L.P. and affiliates (Previously filed as Exhibit 10.7 to the Form 8-K/A filed February 11, 2005, and incorporated
herein by reference).                                                                                            
|10.8  |  | Stock Pledge Agreement, dated as of February 7, 2005, by and among RFX Acquisition LLC, Ronald S. Boreta, John Boreta and Boreta Enterprises, Ltd. (Previously filed as Exhibit 10.8 to the Form 8-K/A filed February 11, 2005,
and incorporated herein by reference).                                                                              
|10.9  |  | Lease Agreement, dated as of February 7, 2005, between Gary A. Hovey and Barry J. Siegel, as Trustees of The Promenade Trust, as Landlord, and Elvis Presley Enterprises, Inc., as Tenant with respect to the Graceland property
(Previously filed as Exhibit 10.9 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).
|10.10 |  | Elvis Presley Enterprises, Inc. Shareholders Agreement, dated as of February 7, 2005 (Previously filed as Exhibit 10.10 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                                                                                                                                           
|10.11 |  | Amended and Restated Operating Agreement of Elvis Presley Enterprises, LLC, dated as of February 7, 2005 (Previously filed as Exhibit 10.11 to the Form 8-K/A filed February 11, 2005, and incorporated herein by
reference).                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                     

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|10.12 |   | Bridge Loan Credit Agreement, dated as of February 7, 2005 among the Company, EPE Holding Corporation, certain financial institutions or entities from time to time, Bear, Stearns & Co., Inc., as sole lead arranger, and Bear Stearns
Corporate Lending Inc., as administrative agent (Previously filed as Exhibit 10.12 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.13 |   | Amended and Restated Bridge Loan Credit Agreement, dated as of March 17, 2005, among the Company, EPE Holding Corporation, the several banks and other financial institutions or entities from time to time, Bear, Stearns & Co., Inc.,
as sole lead arranger, and Bear Stearns Corporate Lending Inc., as administrative agent (Filed herewith).                                                           
|10.14 |  | Agreement (the "Fox Letter Agreement") between 19 TV Limited, Fremantle Media North America, Inc. and Fox Broadcasting Company, dated April 22, 2002 (Filed herewith).                                                                                                                                                                                                                                      
|10.15 |  | Agreement, between 19 TV Limited, Fremantle Media North America, Inc. and Fox Broadcasting Company, amending the Fox Letter Agreement, dated May 15, 2003 (Filed herewith).                                                                                                                                                                                                                                 
|10.16 |  | Letter Agreement, between Pearson Television Operations BV, (predecessor in interest to Fremantle Media North America, Inc.) and 19 TV Limited, dated July 6, 2001 (Filed herewith).                                                                                                                                                                                                                        
|10.17 |  | Agreement (the "SonyBMG Agreement"), between 19 Recordings Limited and Ronagold Limited, dated February 8, 2002, as amended (Filed herewith).                                                                                                                                                                                                                                                               
|10.18 |  | Letter Agreement between 19 Recordings Limited and Ronagold Limited, amending the SonyBMG Agreement, dated October 14, 2004 (Filed herewith).                                                                                                                                                                                                                                                               
|10.19 |   | Director's Service Agreement, dated March 17, 2005 between 19 Entertainment Limited and Simon Robert Fuller (Filed herewith).                                                                                                                                                                                                                                                                               
|10.20 |   | Confidentiality, Non-Competition, Non-Solicitation, and Non-Recruitment Agreement, dated as of March 17, 2005 by and between Simon Robert Fuller, the Company and CKX UK Holdings Limited (Filed herewith).                                                                                                                                                                                                 
|10.21 |   | Agreement for the sale and purchase of the entire issued share capital of 19 Entertainment Limited, dated March 17, 2005 among Simon Robert Fuller, Fuller Nominees LTD, Ingenious Ventures LTD, the Company and CKX UK Holdings Limited
(Filed herewith).                                                                                                                                                  
|10.22 |   | Bridge Loan Credit Agreement, dated as of March 17, 2005, among the Company, CKX UK Holdings Limited, the several banks and other financial institutions or entities from time to time, Bear, Stearns & Co., Inc., as sole lead
arranger, and Bear Stearns Corporate Lending Inc., as administrative agent (Filed herewith).                                                                                
|14.1  |   | Code of Ethics (Previously filed as Exhibit 14.1 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                                                                                                                                                                                                                                                                          
|31.1  |   | Certification of Principal Executive Officer (Filed herewith).                                                                                                                                                                                                                                                                                                                                              
|31.2  |   | Certification of Principal Financial Officer (Filed herewith).                                                                                                                                                                                                                                                                                                                                              
|32.1  |   | Section 1350 Certification of Principal Executive Officer (Filed herewith).                                                                                                                                                                                                                                                                                                                                 
|32.2  |   | Section 1350 Certification of Principal Financial Officer (Filed herewith).                                                                                                                                                                                                                                                                                                                                 
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                             

41

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|99.1 |  | The Presley Business Combined Statements of Net Assets to be Sold and Related Combined Statements of Operations and Royalty Income and Net Assets and of Cash Flows as of September 30, 2004, December 31, 2003 and 2002 and for the Nine Months
Ended September 30, 2004 and for Each of the Three Years Ended December 31, 2003 (Previously filed as Exhibit 99.1 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|99.2 |  | Unaudited Pro Forma Condensed Combined Financial Statements (Previously filed as Exhibit 99.2 to the Form 8-K/A filed February 11, 2005, and incorporated herein by reference).                                                                                                                                                                                                                                                                      
|99.3 |  | 19 Entertainment's Report and Financial Statements filed with the United Kingdom Registrar of Companies under Section 242 of the Companies Act of 1985 (Previously furnished as Exhibit 99.2 to the Form 8-K filed March 18, 2005, and
incorporated herein by reference).                                                                                                                                                                            

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On
February 8, 2005, the Company filed a Current Report on Form 8-K, dated February 7, 2005, reporting under Item 2.01 that the Company acquired a
controlling interest in the Presley Business. The Company also reported the unregistered sale of equity securities under Item 3.02, a change in control of the Company under Item 5.01, a change in
officers and directors of the Company under Item 5.02 and amendments to the Company's By-Laws under Item 8.01. On February 11, 2005, an amendment to the Form 8-K,
dated February 8, 2005, was filed on Form 8-K/A. The Presley Business Combined Statements of Net Assets to be Sold and Related Combined Statements of Operations and Royalty
Income and Net Assets and of Cash Flows as of September 30, 2004, December 31, 2003 and 2002 and for the Nine Months Ended September 30, 2004 and for Each of the Three Years Ended
December 31, 2003 were filed as Exhibit 99.1 and Unaudited Pro Forma Condensed Combined Financial Statements of the Company were filed as Exhibit 99.2 to such
Form 8-K/A.

On
March 18, 2005, the Company filed a Current Report on Form 8-K, dated March 17, 2005, reporting entry into a share purchase agreement under Item 1.01
and the acquisition of 19 Entertainment Limited under Item 2.01. The Company also reported that it entered into the 19 Entertainment short-term senior loan under Item 2.03, the
unregistered sale of equity securities under Item 3.02, the appointment of a principal officer under Item 5.02 and Regulation FD Disclosure under Item 7.01. 19 Entertainment's Report and Financial
Statements filed with the United Kingdom Registrar of Companies under Section 242 of the Companies Act of 1985 was furnished as Exhibit 99.1 to such Form 8-K. On
March 25, 2005, an amendment to the Form 8-K, dated March 17, 2005, was filed on Form 8-K/A.

On
March 25, 2005, the Company filed a Current Report on Form 8-K, dated March 25, 2005, reporting under Item 1.01 the change in the Company's state of
incorporation through a merger with a wholly owned subsidiary of the Company. The Company also reported the unregistered sale of equity securities under Item 3.02 and a material modification to the
rights of security holders under Item 3.03.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

| |  | CKX, INC.
| |  | ---------
| |  | BY:      
| |  | BY:      

DATE:    May
16, 2005

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