##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, 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, 2007ORo

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

27-0118168(State or other jurisdiction
    of
    incorporation or organization)

(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
   þ o
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ




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##### Table of Contents



TABLE OF
    CONTENTS
   
 Part I.


FINANCIAL INFORMATIONItem 1


Financial StatementsCondensed Consolidated Balance Sheets (Unaudited)
    at September 30, 2007 and December 31, 2006


2Condensed Consolidated Statements of Operations
    (Unaudited) for the three months ended September 30, 2007
    and 2006 (as restated)


3Condensed Consolidated Statements of Operations
    (Unaudited) for the nine months ended September 30, 2007
    and 2006 (as restated)


4Condensed Consolidated Statements of Cash Flows
    (Unaudited) for the nine months ended September 30, 2007
    and 2006 (as restated)


5Notes to Condensed Consolidated Financial
    Statements (Unaudited)


7Item 2


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


23Item 3


Quantitative and Qualitative Disclosures About
    Market Risk


45Item 4


Controls and Procedures


46Part II


OTHER INFORMATIONItem 1


Legal Proceedings


46Item 6


Exhibits


47EX-2.4: AMENDED MEMBERSHIP INTEREST PURCHASE AGREEMENTEX-10.1: AMENDED REVOLVING CREDIT AGREEMENTEX-10.2: AMENDMENT NO. 2 TO THE REVOLVING CREDIT AGREEMENTEX-10.3: AMENDMENT NO. 1 TO THE REVOLVING CREDIT AGREEMENTEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION  1




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##### Table of Contents



CKX,
    INC.
  CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
   September 30,


December 31,2007


2006(In thousands, except share and per share information)ASSETSCurrent assets:Cash and cash equivalents

$
48,712


$
36,610Receivables, net of allowance for doubtful accounts of $542 at
    September 30, 2007 and $457 at December 31, 2006


49,849



23,364Due from related party


581



Inventories, net of allowance for obsolescence of $996 at
    September 30, 2007 and $636 at December 31, 2006


1,928



2,192Prepaid expenses and other current assets


7,449



2,758Prepaid income taxes






7,014Deferred tax assets


1,158



760Total current assets


109,677



72,698Property and equipment  net


42,885



35,329Receivables


1,813



1,274Due from related party


6,000



Deferred production costs


640



Investment in FXRE


1,901



Other assets


20,708



20,394Goodwill


151,195



143,946Other intangible assets  net


188,131



199,805Deferred tax assets


1,202



1,199TOTAL ASSETS

$
524,152


$
474,645LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
8,124


$
9,612Accrued expenses


34,259



16,831Current portion of long-term debt


652



631Income taxes payable


10,869



Other current liabilities


293



497Deferred revenue


6,956



12,492Total current liabilities


61,153



40,063Long-term liabilities:Long-term debt


102,481



3,070Deferred revenue


3,209



2,566Other long-term liabilities


4,566



4,359Deferred tax liabilities


24,931



26,623Total liabilities


196,340



76,681Minority interest


4,290



3,953Redeemable restricted common stock 
    1,672,170 shares outstanding at September 30, 2007 and
    December 31, 2006


23,002



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


22,825



22,825Series C  1 share outstanding






Common stock, $0.01 par value: authorized
    200,000,000 shares, 95,398,757 and 94,237,075 shares
    issued and outstanding at September 30, 2007 and
    December 31, 2006, respectively


954



942Additional
    paid-in-capital


374,412



373,115Accumulated deficit


(118,480
)


(36,562
)Accumulated other comprehensive income


20,809



10,689Total stockholders equity


300,520



371,009TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
524,152


$
474,645    2




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##### Table of Contents



CKX,
    INC.
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (UNAUDITED)
  Three MonthsThree Months


EndedEnded


September 30,September 30,


20062007


(as Restated)(1)(In thousands, except share and per share information)Revenue

$
99,069


$
76,522Operating expenses:Cost of sales


43,566



34,356Selling, general and administrative expenses


21,810



17,801Corporate expenses


5,456



3,832Depreciation and amortization


5,658



5,309Merger and distribution-related costs


1,490



Acquisition-related costs






2,513Other costs


884



489Total operating expenses


78,864



64,300Operating income


20,205



12,222Interest income


545



138Interest expense


(2,084
)


(382
)Other expense


(8
)


(861
)Income before income taxes, equity in earnings of affiliates and
    minority interest


18,658



11,117Income tax expense


4,256



2,790Income before equity in earnings of affiliates and minority
    interest


14,402



8,327Equity in earnings of affiliates


514



296Minority interest


(1,032
)


(372
)Income from continuing operations


13,884



8,251Discontinued operations


(7,451
)


Net income


6,433



8,251Dividends on preferred stock


(456
)


(456
)Net income available to common shareholders

$
5,977


$
7,795Basic and diluted income per share:Income from continuing operations

$
0.14


$
0.09Discontinued operations


(0.07
)


Dividends on preferred stock


(0.01
)


(0.01
)Basic and diluted income per share

$
0.06


$
0.08Average number of common shares outstanding:Basic


96,985,517



92,327,445Diluted


97,087,081



96,096,416     (1)
    
    See Note 1 to the Unaudited Condensed Consolidated
    Financial Statements   3




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##### Table of Contents



CKX,
    INC.
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (UNAUDITED)
  Nine MonthsNine Months


EndedEnded


September 30,September 30,


20062007


(as Restated)(1)(In thousands, except share and per share information)Revenue

$
220,998


$
177,841Operating expenses:Cost of sales


80,035



68,093Selling, general and administrative expenses


62,267



47,219Corporate expenses


14,137



11,254Depreciation and amortization


16,756



15,163Merger and distribution-related costs


4,251



Acquisition-related costs






3,159Other costs


1,249



904Total operating expenses


178,695



145,792Operating income


42,303



32,049Interest income


1,088



1,125Interest expense


(3,423
)


(751
)Other expense


(17
)


(1,893
)Income before income taxes, equity in earnings of affiliates and
    minority interest


39,951



30,530Income tax expense


18,170



11,490Income before equity in earnings of affiliates and minority
    interest


21,781



19,040Equity in earnings of affiliates


1,115



724Minority interest


(1,786
)


(1,034
)Income from continuing operations


21,110



18,730Discontinued operations


(8,430
)


Net income


12,680



18,730Dividends on preferred stock


(1,368
)


(1,368
)Net income available to common stockholders

$
11,312


$
17,362Basic income per share:Income from continuing operations

$
0.22


$
0.20Discontinued operations


(0.09
)


Dividends on preferred stock


(0.01
)


(0.01
)Basic income per share

$
0.12


$
0.19Diluted income per share:Income from continuing operations

$
0.22


$
0.19Discontinued operations


(0.09
)


Dividends on preferred stock


(0.01
)


(0.01
)Diluted income per share

$
0.12


$
0.18Average number of common shares outstanding:Basic


96,865,595



92,252,617Diluted


96,979,322



96,178,307     (1)
    
    See Note 1 to the Unaudited Condensed Consolidated
    Financial Statements   4




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##### Table of Contents



CKX,
    INC
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (UNAUDITED)
  Nine MonthsNine Months


EndedEnded


September 30,September 30,


20062007


(as Restated)(1)(In thousands)Cash flows from operating activities:Net income

$
12,680


$
18,730Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


16,756



15,163Unrealized foreign currency gains and losses


1,249



1,893Share-based payments


989



766Equity in earnings of affiliates, net of cash received


971



Deferred income taxes


(6,567
)


(4,775
)Non-cash interest expense


987



Provision for accounts receivable allowance


85



23Provision for inventory allowance


361



262Minority interest


1,786



1,034Changes in operating assets and liabilities:Receivables


(27,109
)


(13,406
)Inventory


(97
)


422Prepaid expenses


(4,691
)


(73
)Prepaid income taxes


7,014



Other assets


(664
)


(3,776
)Accounts payable and accrued expenses


15,940



21,029Deferred revenue


(4,893
)


(6,356
)Income taxes payable


10,614



15,856Other


(185
)


(726
)Net cash provided by continuing operations


25,226



46,066Cash from discontinued operations


8,430



Net cash provided by operating activities


33,656



46,066Cash flows from investing activities:Investment in and loan to FXRE


(108,307
)


Purchases of businesses, net of cash acquired






(60,864
)Acquisition of certain assets of Elvis-themed museum






(3,928
)Proceeds from sale of marketable securities






42,625Purchases of property and equipment


(9,428
)


(8,756
)Other


(1,750
)


Net cash used in investing activities


(119,485
)


(30,923
)Cash flows from financing activities:Borrowings under revolving credit facility for acquisition of
    FXRE


100,000



Debt issuance costs for amending the revolving credit facility


(92
)


(3,118
)Proceeds from exercise of warrants


243



Distributions to minority interest shareholders


(1,450
)


(1,473
)Principal payments on debt


(589
)


(571
)Dividends paid on preferred stock


(1,368
)


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


96,744



(6,530
)Effect of exchange rate changes on cash


1,187



3,602Net increase in cash and equivalents


12,102



12,215Cash and cash equivalents  beginning of period


36,610



36,979Cash and cash equivalents  end of period

$
48,712


$
49,194Supplemental cash flow data:Cash paid during the period for:Interest

$
2,644


$
334Income taxes


6,061



2,029     (1)
    
    See Note 1 to the Unaudited Condensed Consolidated
    Financial Statements   5




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##### Table of Contents



Supplemental
    Cash Flow Information
    Accrued but unpaid Series B Convertible Preferred Stock
    Dividends

$
456Dividend of CKXs interests in FXRE to the Distribution
    Trusts (as defined)


93,159     Issuance of note in connection with the acquisition of certain
    assets of Elvis-themed museum

$
750Common stock issued in connection with acquisitions


2,278Accrued but unpaid Series B Convertible Preferred Stock
    Dividends


456    6




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##### Table of Contents



CKX,
    INC.
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS
  1.
    Overview
    and Basis of Presentation  General
  IDOLS American Idol IDOLS American Idol
  Form 10-K
    Restatement
  Foreign Currency Translation
   7




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  Form 10-K
  Three Months Ended


Nine Months EndedSeptember 30, 2006


September 30, 2006As Previously





As PreviouslyStatement of Operations

Reported


As Restated


Reported


As RestatedOther costs

$



$
489


$



$
904Total operating expenses


63,811



64,300



144,888



145,792Operating income


12,711



12,222



32,953



32,049Other income (expense)


(690
)


(861
)


(1,106
)


(1,893
)Income before income taxes, equity in earnings of affiliates and
    minority interest


11,777



11,117



32,221



30,530Income tax expense


2,956



2,790



12,115



11,490Income before equity in earnings of affiliates and minority
    interest


8,821



8,327



20,106



19,040Net income


8,745



8,251



19,796



18,730Net income available to common stockholders


8,289



7,795



18,428



17,362Basic income per common share


0.09



0.08



0.20



0.19Diluted income per common share


0.09



0.08



0.19



0.18   Nine Months EndedSeptember 30, 2006As PreviouslyStatement of Cash Flows

Reported


As RestatedAdjustments to reconcile net income to net cash provided by
    operating activities:Unrealized foreign currency gains and losses

$



$
1,893Changes in operating assets and liabilities:Income taxes payable


16,481



15,856Other


(524
)


(726
)   2.
    Merger
    Agreement    Description
    of Merger Offer
   8




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    20-day
    Form 8-K,
    3.
    Transactions
    Involving FX Real Estate and Entertainment Inc. And FX Luxury
    Realty, LLC     9




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
      Investment
    in FX Luxury Realty
    License
    Agreements
    Form 8-K,
   10




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    June
    Dividend
        Reorganization
    of FX Luxury Realty into FX Real Estate and
    Entertainment
    Form 10-Q
  CKX
    Loan to FXRE
    Additional
    FXRE Equity Investment
   11




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  Second
    FXRE Dividend
  $
    Accounting
    for the Investment and Distributions
  Accounting for Non-monetary
    Transactions Accounting for Impairment or Disposal of
    Long-Lived Assets
      The
    Repurchase Agreement
   12




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    Affiliated
    Elements of Transaction
        Shared
    Services Agreements
   13




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  4.
    Accounting
    Policies  Form 10-K
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Consolidation of Variable Interest Entities Consolidated
    Financial Statements
  Discontinued
    Operations
  Accounting for Non-monetary
    Transactions Accounting for Impairment or Disposal of
    Long-Lived Assets
  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






Discontinued operations, net of income taxes

$
(7,451
)

$
(8,430
)  14




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  5.
    Comprehensive
    Income    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006Net income

$
6,433


$
8,251


$
12,680


$
18,730Other comprehensive income:Foreign currency translation adjustments


5,009



6,674



10,120



17,953Comprehensive income

$
11,442


$
14,925


$
22,800


$
36,683     6.
    Earnings
    Per Share/Common Shares Outstanding  Earnings Per Share
    Three Months Ended September 30,


Nine Months Ended September 30,2007


2006


2007


2006Basic common shares outstanding (including redeemable restricted
    common stock)


96,985,517



92,327,445



96,865,595



92,252,617Incremental shares for assumed exercise of warrants and stock
    options


101,564



3,768,971



113,727



3,925,690Diluted common shares outstanding (including redeemable
    restricted common stock)


97,087,081



96,096,416



96,979,322



96,178,307  15




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
  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


12.3 years


$
28,900


$
(4,924
)

$
23,976Other Presley intangible assets


14.4 years



13,622



(3,671
)


9,95119 Entertainment IDOLS television programming, merchandising and
    sponsorship contracts


4.5 years



82,944



(28,706
)


54,23819 Entertainment other artist management, recording,
    merchandising, and sponsorship contracts


1.7 years



17,120



(10,592
)


6,528MBST artist contracts, profit participation rights and other
    intangible assets


4.1 years



4,270



(1,596
)


2,674$
146,856


$
(49,489
)

$
97,367Indefinite Lived Intangible Assets:Trademarks, publicity rights and other intellectual property













$
90,764     Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


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

$
28,900


$
(3,466
)

$
25,434Other Presley intangible assets


13,622



(2,715
)


10,90719 Entertainment IDOLS television programming, merchandising and
    sponsorship relationships


79,340



(18,812
)


60,52819 Entertainment other artist management, recording,
    merchandising, and sponsorship relationships


16,054



(7,126
)


8,928MBST artist contracts, profit participation rights and other
    intangible assets


4,270



(1,026
)


3,244$
142,186


$
(33,145
)

$
109,041Indefinite Lived Intangible Assets:Trademarks, publicity rights and other intellectual property









$
90,764  16




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    (In thousands)For the remaining three months of 2007

$
4,900For the years ending December 31,2008


18,6002009


16,9002010


16,1002011


15,000     2007ForeignBalance at


Currency





Balance atDecember 31,


Translation


Other


September 30,2006


Adjustment


Adjustments


2007Presley royalties and licensing

$
2,432


$



$



$
2,432Presley Graceland operations


7,675











7,67519 Entertainment


123,742



5,541



(2,766
)


126,517MBST


10,097











10,097Ali Business










4,474



4,474Total

$
143,946


$
5,541


$
1,708


$
151,195     8.
    Debt     17




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
        9.
    Stockholders
    Equity    10.
    Income
    Taxes           18




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
                  11.
    Commitments
    and Contingencies   19




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##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    45-day Form 8-K Form 8-K.
      12.
    Segment
    Information   20




---



##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
      Presley BusinessRoyalties and


Graceland


19





CorporateSegment Information

Licensing


Operations


Entertainment


Ali Business


and Other


Total(Amounts in thousands)Three months ended September 30, 2007:Revenue

$
5,097


$
15,923


$
75,172


$
1,345


$
1,532


$
99,069Operating income (loss)

$
2,362


$
4,245


$
20,035


$
441


$
(6,878
)

$
20,205Depreciation and amortization

$
645


$
534


$
4,237


$
15


$
227


$
5,658OIBDAN

$
3,013


$
4,801


$
24,338


$
460


$
(6,414
)

$
26,198Three months ended September 30, 2006:Revenue

$
2,688


$
11,269


$
61,075


$
617


$
873


$
76,522Operating income (loss)

$
811


$
2,436


$
15,764


$
90


$
(6,879
)

$
12,222Depreciation and amortization

$
645


$
507


$
3,900


$
32


$
225


$
5,309OIBDAN

$
1,459


$
2,957


$
19,724


$
127


$
(6,467
)

$
17,800Nine months ended September 30, 2007:Revenue

$
14,189


$
32,916


$
165,206


$
4,638


$
4,049


$
220,998Operating income (loss)

$
4,954


$
4,671


$
49,843


$
1,845


$
(19,010
)

$
42,303Depreciation and amortization

$
1,936


$
1,552


$
12,548


$
37


$
683


$
16,756OIBDAN

$
6,912


$
6,274


$
62,576


$
1,894


$
(17,608
)

$
60,048Nine months ended September 30, 2006:Revenue

$
9,303


$
25,644


$
134,957


$
3,283


$
4,654


$
177,841Operating income (loss)

$
3,855


$
2,656


$
38,277


$
1,335


$
(14,074
)

$
32,049Depreciation and amortization

$
1,936


$
1,343


$
11,174


$
63


$
647


$
15,163OIBDAN

$
5,801


$
4,027


$
49,611


$
1,403


$
(12,864
)

$
47,978Asset Information:Segment assets at September 30, 2007

$
73,057


$
69,201


$
246,578


$
60,347


$
74,969


$
524,152Segment assets at December 31, 2006

$
73,705


$
62,440


$
222,122


$
54,806


$
61,572


$
474,645  21




---



##### Table of Contents



CKX,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS  (Continued)
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(Amounts in thousands)OIBDAN

$
26,198


$
17,800


$
60,048


$
47,978Depreciation and amortization


(5,658
)


(5,309
)


(16,756
)


(15,163
)Non-cash compensation


(335
)


(269
)


(989
)


(766
)Interest income


545



138



1,088



1,125Interest expense


(2,084
)


(382
)


(3,423
)


(751
)Equity in earnings (loss) of affiliates


514



296



1,115



724Other income (expense)


(8
)


(861
)


(17
)


(1,893
)Income tax expense


(4,256
)


(2,790
)


(18,170
)


(11,490
)Minority interest


(1,032
)


(372
)


(1,786
)


(1,034
)Discontinued operations


(7,451
)






(8,430
)


Net income

$
6,433


$
8,251


$
12,680


$
18,730   13.
    Related
    Party Transactions   22




---



##### 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, 2006. Our future results of
    operations may change materially from the historical results of
    operations reflected in our historical financial 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.
  Restatement
  Form 10-Q.
  General
  IDOLS American
    Idol IDOLS American Idol
    Merger
    Agreement
   23




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##### Table of Contents



Description
    of Merger Offer
      20-day
    Form 8-K,
   24




---



##### Table of Contents



Transactions
    Involving FX Real Estate and Entertainment Inc. and FX Luxury
    Realty, LLC
  Investment
    in FX Luxury Realty
    License
    Agreements
        June
    Dividend
       25




---



##### Table of Contents



Reorganization
    of FX Luxury Realty into FX Luxury Real Estate and
    Entertainment
    Form 10-Q
  CKX
    Loan to FXRE
    Additional
    FXRE Equity Investment
    Second
    FXRE Dividend
     26




---



##### Table of Contents



Accounting
    for the Investment and Distributions
  Accounting for Non-monetary
    Transactions Accounting for Impairment or Disposal of
    Long-Lived Assets
      Affiliated
    Elements of Transaction
       27




---



##### Table of Contents



Shared
    Services Agreements
    Presley
    Business
  and/or and/or
          and/or
  19
    Entertainment
   28




---



##### Table of Contents



IDOLS IDOLS IDOLS IDOLS IDOLS IDOLS
  IDOLS American Idol 1 American Idol 4 American Idol 4 IDOLS
  American Idol IDOLS
  IDOLS American Idol IDOLS American Idol American Idol American Idol (2008-2009), American Idol
  American Idol So You Think You Can Dance American Idol IDOLS So You Think You Can
    Dance
   29




---



##### Table of Contents



Ali
    Business
        Other
        Use of
    OIBDAN
     30




---



##### Table of Contents



Consolidated
    Operating Results Three Months Ended September 30,
    2007
  Compared
    to Three Months Ended September 30, 2006
  Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2007


2006


Variance(In thousands)Revenue

$
99,069


$
76,522


$
22,547Operating expenses


78,864



64,300



14,564Operating income


20,205



12,222



7,983Income tax expense


4,256



2,790



1,466Income from continuing operations


13,884



8,251



5,633Net income


6,433



8,251



(1,818
)Operating income


20,205



12,222



7,983Depreciation and amortization


5,658



5,309



349Non-cash compensation


335



269



66OIBDAN

$
26,198


$
17,800


$
8,398   American Idol
  Presley
    Business  Royalties and Licensing
    Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2007


2006


Variance(In thousands)Revenue

$
5,097


$
2,688


$
2,409Cost of sales


(438
)


(7
)


431Selling, general and administrative expense, excluding non-cash
    compensation


(1,646
)


(1,222
)


424OIBDAN

$
3,013


$
1,459


$
1,554OIBDAN

$
3,013


$
1,459


$
1,554Depreciation and amortization


(645
)


(645
)


Non-cash compensation


(6
)


(3
)


3Operating income

$
2,362


$
811


$
1,551    31




---



##### Table of Contents



Presley
    Business  Graceland Operations
    Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2007


2006


Variance(In thousands)Revenue

$
15,923


$
11,269


$
4,654Cost of sales


(3,650
)


(2,091
)


1,559Selling, general and administrative expense, excluding non-cash
    compensation


(7,472
)


(6,221
)


1,251OIBDAN

$
4,801


$
2,957


$
1,844OIBDAN

$
4,801


$
2,957


$
1,844Depreciation and amortization


(534
)


(507
)


27Non-cash compensation


(22
)


(14
)


8Operating income

$
4,245


$
2,436


$
1,809     th th
  th th
  19
    Entertainment
   32




---



##### 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 and other costs,
    excluding non-cash compensation










(11,862
)OIBDAN









$
24,338OIBDAN









$
24,338Depreciation and amortization










(4,237
)Non-cash compensation










(66
)Operating income









$
20,035   Three Months Ended September 30, 2006

Revenue


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

$
30,666


$
(12,950
)

$
17,716Other IDOLStelevision programs (including license fees
    and sponsorship)


1,104







1,104So You Think You Can Danceand other television
    productions


18,246



(13,751
)


4,495Recorded music, management clients and other


11,059



(5,365
)


5,694$
61,075


$
(32,066
)

$
29,009Selling, general and administrative expenses and other costs,
    excluding non-cash compensation










(9,285
)OIBDAN









$
19,724OIBDAN









$
19,724Depreciation and amortization










(3,900
)Non-cash compensation










(60
)Operating income









$
15,764   American Idol IDOLS So You Think You Can Dance, American Idol So
    You Think You Can Dance
 33




---



##### Table of Contents



So You
    Think You Can Dance
  Ali
    Business
    Corporate
    and Other
  MBST
    Corporate
    Expenses and Other Costs
        Interest
    Income/Expense
    Other
    Expense
   34




---



##### Table of Contents



Income
    Taxes
                     35




---



##### Table of Contents



Equity
    in Earnings of Affiliates
    Minority
    Interest
    Discontinued
    Operations
    Three Months EndedSeptember 30,2007Revenue

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


(8,283
)Equity in losses of unconsolidated subsidiaries


(514
)Income taxes


Discontinued operations, net of income taxes

$
(7,451
)   Consolidated
    Operating Results Nine Months Ended September 30,
    2007
  Compared
    to Nine Months Ended September 30, 2006
  Nine Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2007


2006


Variance(In thousands)Revenue

$
220,998


$
177,841


$
43,157Operating expenses


178,695



145,792



32,903Operating income


42,303



32,049



10,254Income tax expense


18,170



11,490



6,680Income from continuing operations


21,110



18,730



2,380Net income


12,680



18,730



(6,050
)Operating income


42,303



32,049



10,254Depreciation and amortization


16,756



15,163



1,593Non-cash compensation


989



766



223OIBDAN

$
60,048


$
47,978


$
12,070   American Idol
 36




---



##### Table of Contents



Presley
    Business  Royalties and Licensing
    Nine Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2007


2006


Variance(In thousands)Revenue

$
14,189


$
9,303


$
4,886Cost of sales


(1,302
)


(86
)


1,216Selling, general and administrative expense, excluding non-cash
    compensation


(5,975
)


(3,416
)


2,559OIBDAN

$
6,912


$
5,801


$
1,111OIBDAN

$
6,912


$
5,801


$
1,111Depreciation and amortization


(1,936
)


(1,936
)


Non-cash compensation


(22
)


(10
)


(12
)Operating income

$
4,954


$
3,855


$
1,099     Presley
    Business  Graceland Operations
    Nine Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2007


2006


Variance(In thousands)Revenue

$
32,916


$
25,644


$
7,272Cost of sales


(6,493
)


(4,652
)


1,841Selling, general and administrative expense, excluding non-cash
    compensation


(20,149
)


(16,965
)


3,184OIBDAN

$
6,274


$
4,027


$
2,247OIBDAN

$
6,274


$
4,027


$
2,247Depreciation and amortization


(1,552
)


(1,343
)


(209
)Non-cash compensation


(51
)


(28
)


(23
)Operating income

$
4,671


$
2,656


$
2,015    37




---



##### Table of Contents



th th
  th th
  th th
  19
    Entertainment
      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 and other costs,
    excluding non-cash compensation










(31,982
)OIBDAN









$
62,576OIBDAN









$
62,576Depreciation and amortization










(12,548
)Non-cash compensation










(185
)Operating income









$
49,843   38




---



##### Table of Contents



Nine Months Ended September 30, 2006

Revenue


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

$
66,939


$
(19,734
)

$
47,205Other IDOLStelevision programs (including license fees
    and sponsorship)


5,293



(61
)


5,232So You Think You Can Danceand other television
    productions


34,791



(27,804
)


6.987Recorded music, management clients and other


27,934



(14,187
)


13,747$
134,957


$
(61,786
)

$
73,171Selling, general and administrative expenses and other costs,
    excluding non-cash compensation










(23,560
)OIBDAN









$
49,611OIBDAN









$
49,611Depreciation and amortization










(11,174
)Non-cash compensation










(160
)Operating income









$
38,277   American Idol Idols So You Think You Can Dance. American Idol
    6 American Idol 5 American Idol So You Think You Can Dance
  So You Think
    You Can Dance
  Ali
    Business
   39




---



##### Table of Contents



Corporate
    and Other
  MBST
    Corporate
    Expenses and Other Costs
        Interest
    Income/Expense
    Other
    Income
    Income
    Taxes
         40




---



##### Table of Contents



Equity
    in Earnings of Affiliates
    Minority
    Interest
   41




---



##### Table of Contents



Discontinued
    Operations
    Period fromJune 1,2007 toSeptember 30,2007Revenue

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


(6,802
)Equity in losses of unconsolidated subsidiaries


(2,974
)Income taxes


Discontinued operations, net of income taxes

$
(8,430
)   Liquidity
    and Capital Resources
  Revolving Credit Facility 
    Cash
    Flows for the nine months ended September 30, 2007 and
    2006
  Operating
    Activities
     42




---



##### Table of Contents



Investing
    Activities
      Financing
    Activities
      Uses
    of Capital
      Capital
    Expenditures
     43




---



##### Table of Contents



Future
    Acquisitions
    Dividends
      Commitments
    and Contingencies
          Inflation
    Critical
    Accounting Policies
  Form 10-K
  Accounting for Uncertainty in Income Taxes
 44




---



##### Table of Contents



Accounting for Income Taxes
  Consolidation of Variable Interest Entities Consolidated
    Financial Statements
  Accounting for Non-monetary
    Transactions Accounting for Impairment or Disposal of
    Long-Lived Assets
    Off
    Balance Sheet Arrangements
    Item 3.
    Quantitative
    And Qualitative Disclosure About Market Risk    Interest
    Rate Risk
     45




---



##### Table of Contents



Foreign
    Exchange Risk
        19
    Entertainment Put Option
    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   46




---



##### Table of Contents



45-day Form 8-K Form 8-K.
  Item 6.
    Exhibits  ExhibitNo.

Description2
.1

Amendment No. 1, dated as of August 1, 2007, to the
    Agreement and Plan of Merger, dated as of June 1, 2007, by
    and among 19X, Inc., 19X Acquisition Corp. and CKX, Inc.
    (Previously filed as Exhibit 2.1 to the
    Form 8-K
    filed August 1, 2007, and incorporated herein by reference.)2
.2

Amendment No. 2, dated as of September 27, 2007, to
    the Agreement and Plan of Merger, dated as of June 1, 2007
    and amended as of August 1, 2007, by and among 19X, Inc.,
    19 Acquisition Corp. and CKX, Inc. (Previously filed as
    Exhibit 2.1 to the
    Form 8-K
    filed September 28, 2007, and incorporated herein by
    reference.)2
.3

Amendment No. 2, dated September 27, 2007, to the
    Management Cooperation Agreement, dated as of June 1, 2007
    and amended as of July 18, 2007, by and among CKX, Inc. and
    each of the stockholders set forth on Schedule I thereto.
    (Previously filed as Exhibit 2.2 to the
    Form 8-K
    filed September 28, 2007, and incorporated herein by
    reference.)2
.4

Amendment No. 2, dated as September 27, 2007 to
    Membership Interest Purchase Agreement, dated as of June 1,
    2007 and amended as of June 18, 2007, by and among FX
    Luxury Realty, LLC, FX Real Estate and Entertainment Inc., CKX,
    Inc., and Flag Luxury Properties, LLC. (Filed herewith).2
.5

Amendment No. 2, dated as of September 27, 2007, to
    Repurchase Agreement, dated as of June 1, 2007 and amended
    as of June 18, 2007, by and among FX Luxury Realty, LLC,
    CKX, Inc., Flag Luxury Properties, LLC, FX Real Estate and
    Entertainment Inc., Robert F.X. Sillerman, Brett Torino and Paul
    C. Kanavos. (Previously filed as Exhibit 2.3 to the
    Form 8-K
    filed September 28, 2007, and incorporated herein by
    reference.)3
.1

Certificate of Incorporation (Previously filed as
    Exhibit 3.1 to the
    Form 10-KSB
    filed September 30, 2005, and incorporated herein by
    reference.)3
.2

By-Laws (Previously filed as Exhibit 3.2 to the
    Form 8-K
    filed March 25, 2005, and incorporated herein by reference.)4
.1

Registration Rights Agreement, dated March 17, 2005, by and
    among the Company, Simon Robert Fuller and Fuller Nominees
    Limited. (Previously filed as Exhibit 4.2 to the
    Form 10-QSB
    for the period ended March 31, 2005, and incorporated
    herein by reference.) 47




---



##### Table of Contents



ExhibitNo.

Description4
.2

Registration Rights Agreement, dated February 7, 2005
    between the Company, The Huff Alternative Fund, L.P., and The
    Huff Alternative Parallel 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
.3

Letter Agreement, dated June 6, 2005, among the Company,
    The Huff Alternative Fund, L.P. and The Huff Alternative
    Parallel Fund, L.P. (Previously filed as Exhibit 4.9 to
    Amendment No. 3 to
    Form S-1/A
    (Registration Statement
    No. 333-123995)
    filed June 21, 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 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

Third Amendment, dated September 27, 2007, to the Revolving
    Credit Agreement, dated as of May 24, 2006, among CKX,
    Inc., the several banks and other financial institutions or
    entities from time to time parties thereto, Bear,
    Stearns & Co. Inc., as exclusive advisor, sole lead
    arranger and sole bookrunner, UBS Securities LLC and The Bank of
    New York, as co-syndication agents, Lehman Commercial Paper,
    Inc. and Credit Suisse, as codocumentation agents and Bear
    Stearns Corporate Lending Inc., as administrative agent. (Filed
    herewith).10
.2

Second Amendment, dated as of June 1, 2007, to the
    Revolving Credit Agreement, dated as of May 24, 2006, among
    CKX, Inc., the several banks and other financial institutions or
    entities from time to time parties thereto, Bear, Stearns &
    Co. Inc., as exclusive advisor, sole lead arranger and sole
    bookrunner, UBS Securities LLC and The Bank of New York, as
    co-syndication agents, Lehman Commercial Paper, Inc. and Credit
    Suisse, as codocumentation agents and Bear Stearns Corporate
    Lending Inc., as administrative agent. (Filed herewith).10
.3

First Amendment and Waiver, dated February 20, 2007, to the
    Revolving Credit Agreement, dated as of May 24, 2006, among
    CKX, Inc., the several banks and other financial institutions or
    entities from time to time parties thereto, Bear, Stearns &
    Co. Inc., as exclusive advisor, sole lead arranger and sole
    bookrunner, UBS Securities LLC and The Bank of New York, as
    co-syndication agents, Lehman Commercial Paper, Inc. and Credit
    Suisse, as codocumentation agents and Bear Stearns Corporate
    Lending Inc., as administrative agent. (Filed herewith).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).  48




---



##### Table of Contents



SIGNATURES
    Inc.
  BY:
    /s/  Robert
    F.X. Sillerman   Title:
    Chief Executive Officer and Chairman of the Board
  BY:
    /s/  Thomas
    P. Benson   Title:
    Chief Financial Officer, Executive Vice President and Treasurer
   49




---



##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNo.

Description2
.4

Amendment No. 2, dated as September 27, 2007, to
    Membership Interest Purchase Agreement, dated as of June 1,
    2007 and amended as of June 18, 2007, by and among FX
    Luxury Realty, LLC, FX Real Estate and Entertainment Inc., CKX,
    Inc., and Flag Luxury Properties, LLC.10
.1

Third Amendment, dated September 27, 2007, to the Revolving
    Credit Agreement, dated as of May 24, 2006, among CKX,
    Inc., the several banks and other financial institutions or
    entities from time to time parties thereto, Bear,
    Stearns & Co. Inc., as exclusive advisor, sole lead
    arranger and sole bookrunner, UBS Securities LLC and The Bank of
    New York, as co-syndication agents, Lehman Commercial Paper,
    Inc. and Credit Suisse, as codocumentation agents and Bear
    Stearns Corporate Lending Inc., as administrative agent.10
.2

Second Amendment, dated as of June 1, 2007, to the
    Revolving Credit Agreement, dated as of May 24, 2006, among
    CKX, Inc., the several banks and other financial institutions or
    entities from time to time parties thereto, Bear, Stearns &
    Co. Inc., as exclusive advisor, sole lead arranger and sole
    bookrunner, UBS Securities LLC and The Bank of New York, as
    co-syndication agents, Lehman Commercial Paper, Inc. and Credit
    Suisse, as codocumentation agents and Bear Stearns Corporate
    Lending Inc., as administrative agent.10
.3

First Amendment and Waiver, dated February 20, 2007, to the
    Revolving Credit Agreement, dated as of May 24, 2006, among
    CKX, Inc., the several banks and other financial institutions or
    entities from time to time parties thereto, Bear, Stearns &
    Co. Inc., as exclusive advisor, sole lead arranger and sole
    bookrunner, UBS Securities LLC and The Bank of New York, as
    co-syndication agents, Lehman Commercial Paper, Inc. and Credit
    Suisse, as codocumentation agents and Bear Stearns Corporate
    Lending Inc., as administrative agent.31
.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.