##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934For 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
   þ o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ




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##### 





TABLE OF
    CONTENTS
   
 Part I.


FINANCIAL INFORMATIONItem 1


Financial StatementsCondensed Consolidated Balance Sheets at
    September 30, 2008 (Unaudited)and December 31, 2007


3Condensed Consolidated Statements of Operations
    (Unaudited) for the three months ended September 30, 2008
    and 2007


4Condensed Consolidated Statements of Operations
    (Unaudited) for the nine months ended September 30, 2008
    and 2007


5Condensed Consolidated Statements of Cash Flows
    (Unaudited) for the nine months ended September 30, 2008
    and 2007


6Notes to Condensed Consolidated Financial
    Statements (Unaudited)


8Item 2


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


21Item 3


Quantitative and Qualitative Disclosures About
    Market Risk


42Item 4


Controls and Procedures


43Part II


OTHER INFORMATION


43Item 1


Legal Proceedings


43Item 1A.


Risk Factors


43Item 6


Exhibits


45EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   2




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##### Table of Contents



CKX,
    INC.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
 (amounts in thousands, except share data)
  September 30,


December 31,2008


2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
99,789


$
50,947Receivables, net of allowance for doubtful accounts of $490 at
    September 30, 2008 and $832 at December 31, 2007


66,086



42,231Due from related party


337



999Inventories, net of allowance for obsolescence of $783 at
    September 30, 2008 and $627 at December 31, 2007


2,006



2,092Prepaid expenses and other current assets


6,002



5,337Investment in FXRE






6,175Deferred tax assets


1,429



1,293Total current assets


175,649



109,074Property and equipment  net


47,348



43,989Long-term receivables


3,484



1,607Loans to related parties


1,765



7,931Deferred production costs


438



635Other assets


22,980



19,223Goodwill


148,691



160,454Other intangible assets  net


163,586



181,872Deferred tax assets


2,025



670TOTAL ASSETS

$
565,966


$
525,455LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
23,964


$
14,987Accrued expenses


27,196



20,448Accrued dividend






6,175Current portion of long-term debt


548



652Income taxes payable


21,460



6,226Deferred revenue


17,850



12,009Total current liabilities


91,018



60,497Long-term liabilities:Long-term debt


101,933



102,418Deferred revenue


3,874



2,778Other long-term liabilities


3,816



4,216Deferred tax liabilities


35,058



38,083Total liabilities


235,699



207,992Minority interest


5,256



4,757Redeemable restricted common stock 
    1,672,170 shares outstanding at September 30, 2008 and
    December 31, 2007


23,002



23,002Commitments and contingenciesStockholders equity:Preferred stock, $.01 par value, authorized
    75,000,000 shares:Series B  1,491,817 shares outstanding


22,825



22,825Series C  share outstanding






Common stock, $0.01 par value: authorized
    200,000,000 shares, 95,620,610 shares issued and
    outstanding at September 30, 2008 and 95,402,757 issued and
    outstanding at December 31, 2007


956



954Additional
    paid-in-capital


376,703



374,665Accumulated deficit


(91,912
)


(123,746
)Accumulated other comprehensive income (loss)


(6,563
)


15,006Total stockholders equity


302,009



289,704TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
565,966


$
525,455    3




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##### Table of Contents



CKX,
    INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 (amounts in thousands, except share and per share
    data)
  Three Months


Three MonthsEnded


EndedSeptember 30, 2008


September 30, 2007Revenue

$
96,977


$
99,069Operating expenses:Cost of sales


49,940



43,566Selling, general and administrative expenses


20,761



21,818Corporate expenses


3,605



5,456Depreciation and amortization


5,322



5,658Merger and distribution-related costs


272



1,490Other (income) expense


(5,631
)


884Total operating expenses


74,269



78,872Operating income


22,708



20,197Interest income


297



545Interest expense


(1,320
)


(2,084
)Income before income taxes, equity in earnings of affiliates and
    minority interest


21,685



18,658Income tax expense


12,152



4,256Income before equity in earnings of affiliates and minority
    interest


9,533



14,402Equity in earnings of affiliates


299



514Minority interest


(688
)


(1,032
)Income from continuing operations


9,144



13,884Loss from discontinued operations






(7,451
)Net income


9,144



6,433Dividends on preferred stock


(456
)


(456
)Net income available to common stockholders

$
8,688


$
5,977Basic income per share:Income from continuing operations

$
0.09


$
0.14Loss from discontinued operations






(0.07
)Dividends on preferred stock






(0.01
)Basic income per share:

$
0.09


$
0.06Diluted income per share:Income from continuing operations

$
0.09


$
0.14Loss from discontinued operations






(0.07
)Dividends on preferred stock






(0.01
)Diluted income per share:

$
0.09


$
0.06Average number of common shares outstanding:Basic


97,054,680



96,985,517Diluted


97,060,937



97,087,081    4




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##### Table of Contents



CKX,
    INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 (amounts in thousands, except share and per share
    data)
  Nine Months


Nine MonthsEnded


EndedSeptember 30, 2008


September 30, 2007Revenue

$
250,724


$
220,998Operating expenses:Cost of sales


100,321



80,035Selling, general and administrative expenses


57,921



62,284Corporate expenses


11,906



14,137Depreciation and amortization


16,411



16,756Merger and distribution-related costs


1,955



4,251Other (income) expense


(5,790
)


1,249Total operating expenses


182,724



178,712Operating income


68,000



42,286Interest income


1,402



1,088Interest expense


(4,361
)


(3,423
)Income before income taxes, equity in earnings of affiliates and
    minority interest


65,041



39,951Income tax expense


32,032



18,170Income before equity in earnings of affiliates and minority
    interest


33,009



21,781Equity in earnings of affiliates


1,956



1,115Minority interest


(1,763
)


(1,786
)Income from continuing operations


33,202



21,110Loss from discontinued operations






(8,430
)Net income


33,202



12,680Dividends on preferred stock


(1,368
)


(1,368
)Net income available to common stockholders

$
31,834


$
11,312Basic income per share:Income from continuing operations

$
0.34


$
0.22Loss from discontinued operations






(0.09
)Dividends on preferred stock


(0.01
)


(0.01
)Basic income per share:

$
0.33


$
0.12Diluted income per share:Income from continuing operations

$
0.34


$
0.22Loss from discontinued operations






(0.09
)Dividends on preferred stock


(0.01
)


(0.01
)Diluted income per share:

$
0.33


$
0.12Average number of common shares outstanding:Basic


97,042,732



96,865,595Diluted


97,087,326



96,979,322    5




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CKX,
    INC
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 (amounts in thousands)
  Nine Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2008


2007Cash flows from operating activities:Net income

$
33,202


$
12,680Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


16,411



16,756Impact on cash of discontinued operations






8,430Unrealized foreign currency gains and losses


(4,667
)


1,249Share-based payments


2,041



989Equity in earnings of affiliates, net of cash received


(617
)


971Deferred income taxes


(3,571
)


(6,567
)Non-cash interest expense


499



987Provision for inventory and accounts receivable allowance


229



446Minority interest


1,763



1,786Changes in operating assets and liabilities:Receivables


(25,788
)


(27,109
)Inventory


(87
)


(97
)Prepaid expenses


(665
)


(4,691
)Prepaid income taxes






7,014Other assets


3,386



(664
)Accounts payable and accrued expenses


17,037



15,940Deferred revenue


6,937



(4,893
)Income taxes payable


15,234



10,614Other


(382
)


(185
)Net cash provided by operating activities


60,962



33,656Cash flows from investing activities:Investment in and loan to FXRE






(108,307
)Purchases of property and equipment


(6,013
)


(9,428
)Other






(1,750
)Net cash used in investing activities


(6,013
)


(119,485
)Cash flows from financing activities:Borrowings under revolving credit facility for acquisition of
    FXLR






100,000Debt issuance costs for amending the revolving credit facility






(92
)Exercise of warrants






243Distributions to minority interest shareholders


(1,275
)


(1,450
)Principal payments on debt


(589
)


(589
)Dividends paid on preferred stock


(1,368
)


(1,368
)Net cash (used in) provided by financing activities


(3,232
)


96,744Effect of exchange rate changes on cash


(2,875
)


1,187Net increase in cash and equivalents


48,842



12,102Cash and cash equivalents  beginning of period


50,947



36,610Cash and cash equivalents  end of period

$
99,789


$
48,712Supplemental cash flow data:Cash paid during the period for:Interest

$
4,146


$
2,644Income taxes


20,726



6,061   6




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##### Table of Contents



Supplemental Cash Flow InformationThe Company had the following non-cash investing and financing
    activities in the nine months ended September 30, 2008 (in
    thousands):Distribution of final 2% ownership interest in FX Real Estate
    and Entertainment Inc.

$
6,175Accrued but unpaid Series B Convertible Preferred Stock
    Dividends


456The Company had the following non-cash investing and financing
    activities in the nine months ended September 30, 2007 (in
    thousands):Accrued but unpaid Series B Convertible Preferred Stock
    Dividends

$
456Dividend of 50% of CKXs interests in FX Luxury Realty LLC
    to the Distribution Trusts


93,159    7




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CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL STATEMENTS
  1.
    Overview  General
  IDOLS American Idol IDOLS American Idol,
  Form 10-K
  2.
    Merger
    Agreement      Affiliated
    Elements of Transaction
    3.
    Transactions
    Involving FX Real Estate and Entertainment Inc. and FX Luxury
    Realty, LLC     8




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##### Table of Contents



Investments
    in FX Luxury Realty and FX Real Estate and Entertainment Inc.
    and Distributions to CKX Stockholders
           9




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FXRE
    Financial Condition
          Accounting
    for the Investment and Distributions
  Accounting for
    Non-monetary Transactions, Accounting for
    Impairment or Disposal of Long-Lived Assets
 10




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##### Table of Contents



License
    Agreements
            Discontinued
    Operations
  Accounting for Non-monetary Transactions, Accounting for
    Impairment or Disposal of Long-Lived Assets
 11




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##### Table of Contents



Three Months


Period fromEnded


June 1, 2007 toSeptember 30,


September 30,2007


2007Revenue

$
1,346


$
1,346Total costs and expenses, net of minority interest share


(8,283
)


(6,802
)Equity in losses of unconsolidated subsidiaries


(514
)


(2,974
)Income taxes






Loss from discontinued operations, net of income taxes

$
(7,451
)

$
(8,430
)   CKX
    Loan to FXRE
    Shared
    Services Agreement
             12




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4.
    Accounting
    Policies  Form 10-K
  Impact
    of Recently Issued Accounting Standards
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Business Combinations Noncontrolling Interests in Consolidated Financial
    Statements
  5.
    Comprehensive
    Income    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Net income

$
9,144


$
6,433


$
33,202


$
12,680Other comprehensive income:Foreign currency translation adjustments


(21,807
)


5,009



(21,569
)


10,120Comprehensive income (loss)

$
(12,663
)

$
11,442


$
11,633


$
22,800     6.
    Earnings
    Per Share/Common Shares Outstanding  Earnings Per Share
 13




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##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Basic common shares outstanding (including redeemable restricted
    common stock)


97,054,680



96,985,517



97,042,732



96,865,595Incremental shares for assumed exercise of stock options (and
    warrants in 2007)


6,257



101,564



44,594



113,727Diluted common shares outstanding (including redeemable
    restricted common stock)


97,060,937



97,087,081



97,087,326



96,979,322   7.
    Intangible
    Assets and Goodwill    WeightedAverage


Gross





NetRemaining


Carrying


Accumulated


CarryingUseful Life


Amount


Amortization


AmountDefinite Lived Intangible Assets:Presley record, music publishing, film and video rights


11.3 years


$
28,900


$
(6,868
)

$
22,032Other Presley intangible assets


13.4 years



13,622



(4,945
)


8,67719 Entertainment IDOLS television programming, merchandising and
    sponsorship relationships


3.5 years



73,629



(36,182
)


37,44719 Entertainment other artist management, recording,
    merchandising, and sponsorship relationships


0.9 year



15,383



(12,631
)


2,752MBST artist contracts, profit participation rights and other
    intangible assets


3.2 years



4,270



(2,356
)


1,914$
135,804


$
(62,982
)

$
72,822     Balance atSeptember 30,2008Indefinite Lived Intangible Assets:Presley and Ali trademarks, publicity rights and other
    intellectual property

$
90,764  14




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##### Table of Contents



Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


AmountDefinite Lived Intangible Assets:Presley record, music publishing, film and video rights

$
28,900


$
(5,408
)

$
23,492Other Presley intangible assets


13,622



(3,990
)


9,63219 Entertainment IDOLS television programming, merchandising and
    sponsorship relationships


80,879



(30,930
)


49,94919 Entertainment other artist management, recording,
    merchandising, and sponsorship relationships


16,898



(11,347
)


5,551MBST artist contracts, profit participation rights and other
    intangible assets


4,270



(1,786
)


2,484$
144,569


$
(53,461
)

$
91,108   Balance atDecember 31,2007Indefinite Lived Intangible Assets:Presley and Ali trademarks, publicity rights and other
    intellectual property

$
90,764     For the three months ending December 31, 2008

$
4,500For the years ending December 31, 2009


16,7002010


15,9002011


14,8002012


5,600     2008ForeignBalance at


Currency





Balance atDecember 31,


Translation


Other


September 30,2007


Adjustment


Adjustments


2008Presley royalties and licensing

$
14,413


$



$



$
14,413Presley Graceland operations


10,166











10,16619 Entertainment


121,328



(10,817
)


(946
)


109,565MBST


10,097











10,097Ali Business


4,450











4,450Total

$
160,454


$
(10,817
)

$
(946
)

$
148,691     Goodwill and Other
    Intangible Assets
 15




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8.
    Debt        9.
    Stockholders
    Equity        10.
    Income
    Taxes       16




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##### Table of Contents



Accounting for
    Uncertainty in Income Taxes
        11.
    Commitments
    and Contingencies  hotel/casino Consolidation of Variable Interest
    Entities
 17




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18




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##### Table of Contents



12.
    Segment
    Information      Presley BusinessRoyalties and


Graceland


19





CorporateSegment Information

Licensing


Operations


Entertainment


Ali Business


and Other


Total(Amounts in thousands)Three months ended September 30, 2008:Revenue

$
5,242


$
12,554


$
76,721


$
383


$
2,077


$
96,977Operating income (loss)

$
1,632


$
2,830


$
21,606


$
(24
)

$
(3,336
)

$
22,708Depreciation and amortization

$
645


$
566


$
3,866


$
15


$
230


$
5,322OIBDAN

$
2,286


$
3,417


$
26,155


$
(5
)

$
(2,906
)

$
28,947Three months ended September 30, 2007:Revenue

$
5,097


$
15,923


$
75,172


$
1,345


$
1,532


$
99,069Operating income (loss)

$
2,362


$
4,245


$
20,032


$
441


$
(6,883
)

$
20,197Depreciation and amortization

$
645


$
534


$
4,237


$
15


$
227


$
5,658OIBDAN

$
3,013


$
4,801


$
24,335


$
460


$
(6,419
)

$
26,190Nine months ended September 30, 2008:Revenue

$
13,370


$
29,464


$
201,086


$
2,849


$
3,955


$
250,724Operating income (loss)

$
5,728


$
4,106


$
72,145


$
573


$
(14,552
)

$
68,000Depreciation and amortization

$
1,936


$
1,681


$
12,059


$
45


$
690


$
16,411OIBDAN

$
7,692


$
5,848


$
85,526


$
630


$
(13,244
)

$
86,452Nine months ended September 30, 2007:Revenue

$
14,189


$
32,916


$
165,206


$
4,638


$
4,049


$
220,998Operating income (loss)

$
4,954


$
4,671


$
49,825


$
1,845


$
(19,009
)

$
42,286Depreciation and amortization

$
1,936


$
1,552


$
12,548


$
37


$
683


$
16,756OIBDAN

$
6,912


$
6,274


$
62,558


$
1,894


$
(17,607
)

$
60,031Asset Information:Segment assets at September 30, 2008

$
85,160


$
75,777


$
201,504


$
58,968


$
144,557


$
565,966Segment assets at December 31, 2007

$
83,324


$
72,846


$
230,696


$
60,053


$
78,536


$
525,455  19




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##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(Amounts in thousands)OIBDAN

$
28,947


$
26,190


$
86,452


$
60,031Depreciation and amortization


(5,322
)


(5,658
)


(16,411
)


(16,756
)Non-cash compensation


(917
)


(335
)


(2,041
)


(989
)Interest income


297



545



1,402



1,088Interest expense


(1,320
)


(2,084
)


(4,361
)


(3,423
)Equity in earnings of affiliates


299



514



1,956



1,115Income tax expense


(12,152
)


(4,256
)


(32,032
)


(18,170
)Minority interest


(688
)


(1,032
)


(1,763
)


(1,786
)Discontinued operations






(7,451
)






(8,430
)Net income

$
9,144


$
6,433


$
33,202


$
12,680   13.
    Related
    Party Transactions          FORWARD
    LOOKING STATEMENTS
  In addition to historical information, this
    Form 10-Q
    (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
    revenue, 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.
 20




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##### Table of Contents



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-K
    for the year ended December 31, 2007. Our future results of
    operations may change materially from the historical results of
    operations reflected in our historical financial statements.
  General
  IDOLS American Idol IDOLS
    Merger
    Agreement
      Affiliated
    Elements of Transaction
    Approval
    Process
   21




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##### Table of Contents



Transactions
    Involving FX Real Estate and Entertainment Inc. and FX Luxury
    Realty, LLC
  Investments
    in FX Luxury Realty and FX Real Estate and Entertainment Inc.
    and Distributions to CKX Stockholders             22




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##### Table of Contents



FXRE
    Financial Condition
          Accounting
    for the Investment and Distributions
    License
    Agreements
     23




---



##### Table of Contents



CKX
    Loan to FXRE
    Affiliated
    Elements of Transactions
      Approval
    Process
   24




---



##### Table of Contents



Shared
    Services Agreement
              Presley
    Business
  and/or and/or
   25




---



##### Table of Contents



and/or
  19
    Entertainment
    IDOLS IDOLS IDOLS IDOLS IDOLS IDOLS
  IDOLS American Idol 1 American Idol 4 American Idol 4 IDOLS
  American Idol IDOLS
  American Idol American Idol American Idol American Idol
 26




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##### Table of Contents



American Idol
  American Idol So You Think You Can Dance IDOLS So You Think You Can Dance
    Ali
    Business
        Other
        Use of
    OIBDAN
   27




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##### Table of Contents



Consolidated
    Operating Results Three Months Ended September 30,
    2008
  Compared
    to Three Months Ended September 30, 2007
  Three Months


Three MonthsEnded


EndedSeptember 30, 2008


September 30, 2007


Variance(In thousands)Revenue

$
96,977


$
99,069


$
(2,092
)Operating expenses


74,269



78,872



(4,603
)Other income (expense)


5,631



(884
)


6,515Operating income


22,708



20,197



2,511Income tax expense


12,152



4,256



7,896Income from continuing operations


9,144



13,884



(4,740
)Net income


9,144



6,433



2,711Operating income

$
22,708


$
20,197


$
2,511Depreciation and amortization


5,322



5,658



(336
)Non-cash compensation


917



335



582OIBDAN

$
28,947


$
26,190


$
2,757   So You Think You
    Can Dance, American Idol.
 28




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##### Table of Contents



Presley
    Business  Royalties and Licensing
    Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2008


2007


Variance(In thousands)Revenue

$
5,242


$
5,097


$
145Cost of sales


(1,406
)


(438
)


(968
)Selling, general and administrative expense, excluding
    non-cash
    compensation


(1,550
)


(1,646
)


96OIBDAN

$
2,286


$
3,013


$
(727
)OIBDAN

$
2,286


$
3,013


$
(727
)Depreciation and amortization


(645
)


(645
)


Non-cash compensation


(9
)


(6
)


(3
)Operating income

$
1,632


$
2,362


$
(730
)     Presley
    Business  Graceland Operations
    Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2008


2007


Variance(In thousands)Revenue

$
12,554


$
15,923


$
(3,369
)Cost of sales


(2,019
)


(3,650
)


1,631Selling, general and administrative expense, excluding non-cash
    compensation


(7,118
)


(7,472
)


354OIBDAN

$
3,417


$
4,801


$
(1,384
)OIBDAN

$
3,417


$
4,801


$
(1,384
)Depreciation and amortization


(566
)


(534
)


(32
)Non-cash compensation


(21
)


(22
)


1Operating income

$
2,830


$
4,245


$
(1,415
)    29




---



##### Table of Contents



th th th
  th th
  19
    Entertainment
    Three Months Ended September 30, 2008

Revenue


Cost of Sales(In thousands)American Idol(including television production, foreign
    syndication, sponsorship, merchandise and touring)

$
28,156


$
(11,380
)

$
16,776Other IDOLStelevision programs (including license fees
    and sponsorship)


4,544



(178
)


4,366So You Think You Can Danceand other television
    productions


32,201



(26,220
)


5,981Recorded music, management clients and other


11,820



(8,677
)


3,143$
76,721


$
(46,455
)

$
30,266Selling, general and administrative expenses, excluding non-cash
    compensation










(9,742
)Other income










5,631OIBDAN









$
26,155OIBDAN









$
26,155Depreciation and amortization










(3,866
)Non-cash compensation










(683
)Operating income









$
21,606   30




---



##### Table of Contents



Three Months Ended September 30, 2007

Revenue


Cost of Sales(In thousands)American Idol(including television production, foreign
    syndication, sponsorship, merchandise and touring)

$
33,015


$
(10,369
)

$
22,646Other IDOLStelevision programs (including license fees
    and sponsorship)


4,406



(228
)


4,178So You Think You Can Danceand other television
    productions


27,462



(22,472
)


4,990Recorded music, management clients and other


10,289



(5,903
)


4,386$
75,172


$
(38,972
)

$
36,200Selling, general and administrative expenses, excluding non-cash
    compensation










(10,981
)Other costs










(884
)OIBDAN









$
24,335OIBDAN









$
24,335Depreciation and amortization










(4,237
)Non-cash compensation










(66
)Operating income









$
20,032     American Idol Other IDOLS
  So You Think You Can Dance Little
    Britain USA
  American Idol
  So You Think You Can Dance Little Britain
    America
    Ali
    Business
   31




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##### Table of Contents



Corporate
    and Other
  MBST
  Little Britain USA
  Corporate
    Expenses and Other Costs
      Interest
    Income/Expense
    Income
    Taxes
            Accounting for
    Uncertainty in Income Taxes
 32




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##### Table of Contents



Equity
    in Earnings of Affiliates
    Minority
    Interest
    Consolidated
    Operating Results for the Nine Months Ended September 30,
    2008
  Compared
    to the Nine Months Ended September 30, 2007
  Nine Months


Nine MonthsEnded


EndedSeptember 30, 2008


September 30, 2007


Variance(In thousands)Revenue

$
250,724


$
220,998


$
29,726Operating expenses


182,724



178,712



4,012Other income (expense)


5,790



(1,249
)


7,039Operating income


68,000



42,286



25,714Income tax expense


32,032



18,170



13,862Income from continuing operations


33,202



21,110



12,092Net income


33,202



12,680



20,522Operating income

$
68,000


$
42,286


$
25,714Depreciation and amortization


16,411



16,756



(345
)Non-cash compensation


2,041



989



1,052OIBDAN

$
86,452


$
60,031


$
26,421   American Idol, So You Think You Can
    Dance So You
    Think You Can Dance,
 33




---



##### Table of Contents



Presley
    Business  Royalties and Licensing
    Nine Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2008


2007


Variance(In thousands)Revenue

$
13,370


$
14,189


$
(819
)Cost of sales


(1,718
)


(1,302
)


(416
)Selling, general and administrative expense, excluding non-cash
    compensation


(3,960
)


(5,975
)


2,015OIBDAN

$
7,692


$
6,912


$
780OIBDAN

$
7,692


$
6,912


$
780Depreciation and amortization


(1,936
)


(1,936
)


Non-cash compensation


(28
)


(22
)


(6
)Operating income

$
5,728


$
4,954


$
774     Presley
    Business  Graceland Operations
    Nine Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2008


2007


Variance(In thousands)Revenue

$
29,464


$
32,916


$
(3,452
)Cost of sales


(4,587
)


(6,493
)


1,906Selling, general and administrative expense, excluding non-cash
    compensation


(19,029
)


(20,149
)


1,120OIBDAN

$
5,848


$
6,274


$
(426
)OIBDAN

$
5,848


$
6,274


$
(426
)Depreciation and amortization


(1,681
)


(1,552
)


(129
)Non-cash compensation


(61
)


(51
)


(10
)Operating income

$
4,106


$
4,671


$
(565
)    34




---



##### Table of Contents



th
    19
    Entertainment
    Nine Months Ended September 30, 2008

Revenue


Cost of Sales(In thousands)American Idol(including television production, foreign
    syndication, sponsorship, merchandise and touring)

$
94,029


$
(21,304
)

$
72,725Other IDOLStelevision programs (including license fees
    and sponsorship)


11,723



(423
)


11,300So You Think You Can Danceand other television
    productions


54,737



(46,969
)


7,768Recorded music, management clients and other


40,597



(24,320
)


16,277$
201,086


$
(93,016
)

$
108,070Selling, general and administrative expenses, excluding non-cash
    compensation










(28,334
)Other income










5,790OIBDAN









$
85,526OIBDAN









$
85,526Depreciation and amortization










(12,059
)Non-cash compensation










(1,322
)Operating income









$
72,145   35




---



##### Table of Contents



Nine Months Ended September 30, 2007

Revenue


Cost of Sales(In thousands)American Idol(including television production, foreign
    syndication, sponsorship, merchandise and touring)

$
80,388


$
(19,959
)

$
60,429Other IDOLStelevision programs (including license fees
    and sponsorship)


10,762



(374
)


10,388So You Think You Can Danceand other television
    productions


46,556



(38,630
)


7,926Recorded music, management clients and other


27,500



(11,685
)


15,815$
165,206


$
(70,648
)

$
94,558Selling, general and administrative expenses, excluding non-cash
    compensation










(30,751
)Other costs










(1,249
)OIBDAN









$
62,558OIBDAN









$
62,558Depreciation and amortization










(12,548
)Non-cash compensation










(185
)Operating income









$
49,825     American Idol 7 American Idol 6 American Idol IDOLS
  So You Think You Can Dance American Idol American Idol
  So You Think You Can Little Britain USA
    Ali
    Business
   36




---



##### Table of Contents



Corporate
    and Other
  MBST
  Little Britain USA
  Corporate
    Expenses and Other Costs
      Interest
    Income/Expense
    Income
    Taxes
           37




---



##### Table of Contents



Accounting for
    Uncertainty in Income Taxes
        Equity
    in Earnings of Affiliates
    Minority
    Interest
    2008
    Financial Outlook
    American Idol
  Liquidity
    and Capital Resources
   38




---



##### Table of Contents



Cash Flow
    for the nine months ended September 30, 2008 and
    2007
  Operating
    Activities
      Investing
    Activities
      Financing
    Activities
     39




---



##### Table of Contents



Uses
    of Capital
      Capital
    Expenditures
        Future
    Acquisitions
    Dividends
     40




---



##### Table of Contents



Commitments
    and Contingencies
        Annual
    Impairment Review
  Goodwill and Other
    Intangible Assets
  Inflation
    Critical
    Accounting Policies
  Form 10-K
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial Liabilities
 41




---



##### Table of Contents



Business Combinations Noncontrolling Interests in Consolidated Financial
    Statements
  Off
    Balance Sheet Arrangements
  Regulation S-K.
  Item 3.
    Quantitative and Qualitative Disclosure About Market
    Risk    Interest
    Rate Risk
        Foreign
    Exchange Risk
        19
    Entertainment Put Option
   42




---



##### Table of Contents



Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15 15d-15
  Changes
    in Internal Controls over Financial Reporting
   Part II 
    Other Information  Item 1.
    Legal
    Proceedings              Item 1A.
    Risk
    Factors  Form 10-K.
 43




---



##### Table of Contents



Form 10-K.
  Current
    economic conditions and the global financial crisis may have an
    impact on our business and financial condition in ways that we
    currently cannot predict.
       44




---



##### Table of Contents



Item 6.
    Exhibits  ExhibitNo.

Description31
.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).  45




---



##### Table of Contents



SIGNATURES
       BY:
    /s/  Robert
    F.X. Sillerman  Name:
    Robert F.X. Sillerman Chief Executive Officer and
 Chairman of the Board
  BY:
    /s/  Thomas
    P. Benson  Name:
    Thomas P. Benson Chief Financial Officer, Executive
 Vice President and Treasurer
   46




---



##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNo.

Description31
.1

Certification of Principal Executive Officer.31
.2

Certification of Principal Financial Officer.32
.1

Section 1350 Certification of Principal Executive Officer.32
.2

Section 1350 Certification of Principal Financial Officer.  47