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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C. 20549
  Form 10-K/A
 Amendment No. 1
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 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. 001-33902
  FX Real Estate and
    Entertainment Inc.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

36-4612924(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
  Securities Registered Pursuant
    to Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, Par Value $0.01 Per Share

The NASDAQ Global Market LLC*   *
  Securities Registered Pursuant
    to Section 12(g) of the Act:
  None
  o þ
  o þ
  þ o
  o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2).
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ




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FX Real
    Estate and Entertainment Inc.
  EXPLANATORY
    NOTE
  Form 10-K
      35-day
   2




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##### 



Form 10-K/A
  TABLE OF CONTENTS
   
 PagePART IIIItem 10.


Directors, Executive Officers and Corporate Governance


4Item 11.


Executive Compensation


7Item 12.


Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters


20Item 13.


Certain Relationships and Related Transactions, and Director
    Independence


23Item 14.


Principal Accountant Fees and Services


28PART IVItem 15.


Exhibits and Financial Statement Schedules


29EX-31.1EX-31.2   3




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PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Executive
    Officers and Directors of FX Real Estate and Entertainment
    Inc.
    Name

Age

PositionRobert F.X. Sillerman


59


Chairman and Chief Executive OfficerPaul C. Kanavos


50


Director, PresidentStephen A. Jarvis


33


Principal Accounting OfficerMitchell Nelson


60


Executive Vice President, General Counsel, SecretaryDavid M. Ledy


58


DirectorHarvey Silverman


66


DirectorMichael J. Meyer


43


DirectorBryan E. Bloom


45


DirectorJohn D. Miller


65


DirectorRobert Sudack


68


Director   Robert F.X. Sillerman
  Paul C. Kanavos
  Stephen A. Jarvis
  Mitchell J. Nelson
 4




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David M. Ledy
  Harvey Silverman
  Michael J. Meyer
  Bryan E. Bloom
  John D. Miller
  Robert Sudack
  Non-Voting
    Designated Preferred Stock Director
   5




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Section 16(a)
    Beneficial Ownership Reporting Compliance
      Code of
    Business Conduct and Ethics
    Form 8-K
  Corporate
    Governance Guidelines
  ® ir.fxree.com
 6




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Board
    Committees
    Committee

MembersAudit Committee

David M. Ledy (Chairman) Michael Meyer
    Harvey SilvermanCompensation Committee

David M. Ledy (Chairman) Michael Meyer
    Harvey SilvermanNominating and Corporate Governance Committee

Harvey Silverman (Chairman)
    Michael Meyer
    David M. Ledy   Audit
    Committee
    ® ®
  ITEM 11.
    EXECUTIVE
    COMPENSATION  Compensation
    Discussion and Analysis
  Compensation
    Committee
  ®
  Overview
    of Compensation Program
      
    Ensure that the interests of the Companys executives are
    aligned with those of its stockholders;
    Offer a total compensation program that is competitive with the
    compensation offered by the companies with which the Company
    competes for executive talent; 7




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
    Provide incentive to achieve financial goals and objectives,
    both in terms of financial performance and stockholder
    value; and
    Provide opportunity for reward that fosters executive retention.  Explanatory Note
  Components
    of Compensation for Named Executive Officers
    Base
    Salary
  Employment
    Contracts
  Annual
    Incentives
    Executive
    Equity Incentive Plan
    Administration.
 8




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Maximum Shares and Award Limits.
  Eligibility.
  Stock Options.
    Amendment and Termination.
   9




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Equity
    Incentive Plan
    Administration.
  Maximum Shares and Award Limits.
  Eligibility.
  Stock Options.
   10




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Stock Awards and Performance Based Compensation.
  Deferred Shares.
  Performance Shares and Performance Units.
  Amendment and Termination.
  and/or
  Employment
    Contracts
  Employment Separation Agreements and
    Releases with Messrs. Shier and Torino.
 11




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Form S-3,
   Executive Equity Incentive Plan
         12




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Employment
    Separation Agreements and Releases with Messrs. Shier and
    Torino
    
    a contingent severance payment in an amount equal to 2% of any
    future net proceeds or fees received by the Company
    and/or the
    Companys subsidiary FX Luxury, LLC from the sale
    and/or
    development of the Las Vegas properties owned by the
    Companys Las Vegas subsidiaries, up to a maximum of
    $600,000, provided that such 2% may be increased (but not the
    maximum amount of $600,000) in the event the Company enters into
    an equivalent severance arrangement with either its President or
    Executive Vice President, both of whom are still employed by the
    Company, that provides for a percentage greater than 2%;
    COBRA health insurance for a period of three calendar months
    after the effective date to continue the same health insurance
    benefits that he and his covered dependents enjoy on the
    effective date;
    continued coverage under the Companys directors and
    officers liability insurance policy in effect on the effective
    date until such policy ceases to be in effect;
    a grant on the effective date of immediately exercisable
    incentive stock options to purchase up to 1,000,000 shares
    of the Companys common stock at an exercise price equal to
    the fair market value of a share of the Companys common
    stock on the effective date; and
    the retention of previously granted and vested stock options to
    purchase up to 750,000 shares of the Companys common
    stock at an exercise price of $10.00 per share.        
    a contingent severance payment in an amount equal to 2% of any
    future net proceeds or fees received by the Company
    and/or the
    Companys subsidiary FX Luxury, LLC from the sale
    and/or
    development of the Las Vegas properties owned by the
    Companys Las Vegas subsidiaries, up to a maximum of
    $84,375, provided that such 2% may be increased (but not the
    maximum amount of $84,375) in the event the Company enters into
    an equivalent severance arrangement with either its President or
    Executive Vice President, both of whom are still employed by the
    Company, that provides for a percentage greater than 2%; 13




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
    COBRA health insurance for a period of three calendar months
    after the effective date to continue the same health insurance
    benefits that he and his covered dependents enjoy on the
    effective date;
    continued coverage under the Companys directors and
    officers liability insurance policy in effect on the effective
    date until such policy ceases to be in effect; and
    the retention of previously granted and vested stock options to
    purchase up to 80,000 shares of the Companys common
    stock at an exercise price of $20.00 per share.      Form 8-K
  Shared
    Services Agreement
  Item 13
    Certain Relationships, Related Transactions and Director
    Independence Shared Services Agreement
  Compensation
    Committee Interlocks and Insider Participation
  Item 13. Certain
    Relationships, Related Transactions, and Director
    Independence.
    
    a member of the compensation committee (or other committee of
    the board of directors performing equivalent functions or, in
    the absence of any such committee, the entire board of
    directors) or another entity, one of whose executive officers
    served on our compensation committee;
    a director of another entity, one of whose executive officers
    served on our compensation committee; and
    a member of the compensation committee (or other committee of
    the board of directors performing equivalent functions or, in
    the absence of any such committee, the entire board of
    directors) of another entity, one of whose executive officers
    served as a director of us. 14




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COMPENSATION
    COMMITTEE REPORT
    
  2008
    Summary Compensation Table
    Change inPensionValueandNonqualifiedDeferredStock

Option

Compensation

All OtherName         and

Fiscal

Salary

Bonus

Awards

Awards

Earnings

CompensationPrincipal Position

Year

($)

($)

($)

($)(1)

($)

(2)

TotalRobert F.X. Sillerman


2008


$



-- (3)

















$



$
Chairman and ChiefExecutive OfficerPaul Kanavos


2008


$



600,000










410,700






$
12,559


$
1,023,259PresidentBarry Shier (4)


2008


$



1,981,731


















24,087


$
2,005,818Resigning Chief Operating
    OfficerThomas P. Benson (5)


2008


$



-- (6)

$















$



$
Former  Chief  Financial Officer





$Brett Torino (7)


2008


$



450,000


















8,286


$
458,286Resigning  Chairman-Las Vegas DivisionMitchell Nelson (8)


2008


$



525,000

$








328,560






$
26,084


$
879,644General Counsel   ­
    ­
  (1)
    
    The amounts in this column were calculated utilizing the
    provisions of Statement of Financial Accounting Standards
    No. 123R, Share-Based Payments
    (SFAS 123R). The amounts represent the amounts
    recognized by us for the fiscal year 2008 for the fair value of
    stock options granted to the named executive officers in
    accordance with SFAS 123R. For information regarding the
    assumptions underlying the valuation of these option grants
    under SFAS 123R, see Note 13 (Share-Based Payments) of
    our consolidated financial statements included in the Original
    Report. These amounts reflect our accounting expense, and do not
    correspond to the actual value that will be realized by these
    Named Executive Officers(2)
    
    Includes 401K matching and health benefits to the extent the
    named executive received such benefits during 2008.(3)
    
    Mr. Sillerman does not receive a base salary under the
    terms of his employment agreement. Mr. Sillerman provides
    his services pursuant to and in accordance with the Shared
    Services Agreement by and between the Company and CKX, Inc. The
    Company reimburses CKX for a pro rata portion of
    Mr. Sillermans CKX 15




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salary based on the amount of Mr. Sillermans business
    time spent on Company matters. For the year ended
    December 31, 2008, the Company reimbursed CKX in the amount
    of $260,189 for services provided by Mr. Sillerman.(4)
    
    Mr. Shier resigned from his position as Chief Operating
    Officer in April 2009, such resignation to become effective as
    of May 8, 2009.(5)
    
    Mr. Benson resigned from the position of Chief Financial
    Officer in February 2009.(6)
    
    Prior to his resignation, Mr. Benson did not receive a
    salary under the terms of his employment agreement.
    Mr. Benson provided his services pursuant to and in
    accordance with the Shared Services Agreement by and between the
    Company and CKX, Inc. The Company reimbursed CKX for a pro rata
    portion of Mr. Bensons CKX salary based on the amount
    of Mr. Bensons business time spent on Company
    matters. For the year ended December 31, 2008, the Company
    reimbursed CKX in the amount of $121,365 for services provided
    by Mr. Benson.(7)
    
    Mr. Torino resigned from his position as Chairman-Las Vegas
    Division in April 2009, such resignation to become effective as
    of May 8, 2009.(8)
    
    Under the terms of his employment agreement with the Company,
    Mr. Nelson is permitted to devote up to one-third of his
    business time to providing services for or on behalf of
    Mr. Sillerman, or Flag Luxury Properties, LLC
    (Flag), provided that Mr. Sillerman and/or
    Flag, as the case may be, will reimburse the Company for the
    fair market value of the services provided for him or it by
    Mr. Nelson. For the year ended December 31, 2008, Flag
    reimbursed the Company for $100,000 of Mr. Nelsons
    base salary as result of services provided for it by
    Mr. Nelson.  Options
    Granted in Fiscal Year 2008
    Outstanding
    Equity Awards at December 31, 2008
  Option AwardsEquityIncentivePlanAwards:Number of

Number of

Number ofSecurities

Securities

SecuritiesUnderlying

Underlying

UnderlyingUnexercised

Unexercised

Unexercised

OptionOptions

Options

Unearned

Exercise

Option(#)

(#)

Options

Price

ExpirationName

Exercisable

Unexercisable

($)

($)

DateRobert F.X. Sillerman



(1)


6,000,000







20.00



1/10/18
(2)


250,000







5.00



5/19/18
(2)


250,000







6.00



5/19/18Paul Kanavos


150,000
(3)


600,000







20.00



12/31/17
(2)


100,000







5.00



5/19/18
(2)


100,000







6.00



5/19/18Barry Shier


750,000
(4)


750,000






$
10.00



12/31/17Tom Benson



(5)


400,000







20.00



1/10/08
(2)


100,000







5.00



5/19/18
(2)


100,000







6.00



5/19/18Brett Torino


80,000
(6)


320,000







20.00



12/31/17Mitchell Nelson


80,000
(7)


320,000







20.00



12/31/17
(2)


100,000







5.00



5/19/18
(2)


100,000







6.00



5/19/18  16




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­
    ­
  (1)
    
    On January 10, 2008, Mr. Sillerman received a grant of
    options to acquire 6,000,000 shares of common stock. The
    options vest ratably over a five year period.(2)
    
    With respect to options granted by the Company on May 19,
    2008, one half of the options have an exercise price of $5.00
    per share and the other half have an exercise price of $6.00 per
    share. The options vest over a five year period, with 40% of the
    $5.00 options vesting after one year, 40% of the $5.00 options
    vesting after year two, 20% of the $5.00 and 20% of the $6.00
    options vesting after year three, 40% of the $6.00 options
    vesting after year four and 40% of the $6.00 options vesting
    after year five.(3)
    
    On December 31, 2007, Mr. Kanavos received a grant of
    options to acquire 750,000 shares of common stock. The
    options vest ratably over a five year period.(4)
    
    On December 31, 2007, Mr. Shier received a grant of
    options to acquire 1,500,000 shares of common stock. The
    options vest ratably over a two year period. Under the terms of
    Mr. Shiers employment separation agreement and
    release, Mr. Shier shall retain the options vested at
    December 31, 2008 to acquire 750,000 shares and
    forfeit the remaining unvested options to acquire
    750,000 shares.(5)
    
    On January 10, 2008, Mr. Benson received a grant of
    options to acquire 400,00 shares of common stock. The
    options vest ratably over a five year period. These options were
    cancelled upon Mr. Bensons resignation as Chief
    Financial Officer in February 2009.(6)
    
    On December 31, 2007, Mr. Torino received a grant of
    options to acquire 400,000 shares of common stock. The
    options vest ratably over a five year period. Under the terms of
    Mr. Torinos employment separation agreement and
    release, Mr. Torino shall retain the options vested at
    December 31, 2008 to acquire 80,000 shares and forfeit
    the remaining unvested options to acquire 320,000 shares.(7)
    
    On December 31, 2007, Mr. Nelson received a grant of
    options to acquire 400,000 shares of common stock. The
    options vest ratably over a five year period.  2008
    Fiscal Year Option Exercises and Stock Vested
    Pension
    Benefits
    Nonqualified
    Deferred Compensation
    Potential
    Payments upon Termination without Cause or
    Change-in-Control
     17




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Health/InsuranceName

Salary


Bonus


Benefits


TotalRobert F.X. Sillerman

$
-


$
3,000,000


$
70,524


$
3,070,524Paul Kanavos

$
1,800,000


$
-


$
70,524


$
1,870,524Mitchell Nelson

$
1,575,000


$
-


$
70,524


$
1,645,524   ­
    ­
  Potential
    Payments upon Death or Disability
       18




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6-month
  Compensation
    of Non-Employee Directors
            Fees Earned or


StockPaid in Cash


Awards


TotalName

($)(2)


($)(3)


($)David Ledy (4)

$
30,500


$
105,500


$
136,000Michael Meyer (5)

$
26,750


$
40,000


$
66,750John Miller (6)

$
--



--


$
--Harvey Silverman (7)

$
42,750


$
76,750


$
119,500Robert Sudack (8)

$
--


$
--


$
--   ­
    ­
  (1)
    
    Represents compensation actually paid during the year ended
    December 31, 2008, which includes compensation for the
    fourth quarter of 2007 and the first three quarters of 2008.(2)
    
    Directors are paid half in cash and half in equity, unless they
    elect to receive a greater percentage of their compensation in
    equity. Based on the low trading price of the Companys
    common stock and in order to avoid the dilutive effect of
    issuing shares of stock at such a depressed value, the Company
    elected to pay all fourth quarter director compensation in cash.(3)
    
    All stock awards are made either in stock options or shares of
    Common Stock and are granted under the Companys 2007
    Long-Term Incentive Compensation Plan.(4)
    
    Mr. Ledy elected to paid all in stock for the first three
    quarters of 2008.(5)
    
    Mr. Meyer was appointed to the Board in May 2008.
    Mr. Meyer elected to be paid in all stock for the second
    and third quarters of 2008.(6)
    
    Mr. Miller was not a member of the Board of Directors
    during the fiscal year ended December 31, 2008.
    Mr. Miller was appointed to the Board in January 2009. 19




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(7)
    
    Mr. Silverman elected to be paid all in stock for the
    second and third quarters of 2008.(8)
    
    Mr. Sudack was not a member of the Board of Directors
    during the fiscal year ended December 31, 2008.
    Mr. Sudack was appointed to the Board in January 2009.  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Securities
    Authorized for Issuance under Equity Compensation
    Plans
  Item 11. Executive
    Compensation  Components of Compensation for Named
    Executive Officers
  (a)

(b)Number of

Weighted-Securities to

Averagebe

Exercise

(c)Issued Upon

Price of

Number ofExercise of

Outstanding

SecuritiesOutstanding

Options,

RemainingOptions, Warrants

Warrants and

Available ForPlan Category

and Rights

Rights

Future Issuance(#)

($)

(#)Equity compensation plans approved by security holders


11,812,794



15.92



3,777,206Equity compensation plans not approved by security holders


-



-



-    20




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Security
    Ownership of Certain Beneficial Owners and Management
    
    each person or entity known by us to beneficially own more than
    5% of the outstanding shares of our common stock,
    each of our continuing and resigning named executive officers;
    each of our directors; and
    all of our directors and continuing and resigning executive
    officers, named as a group.      Shares

Percentage ofBeneficially

CommonName and Address of Beneficial
    Owner(1)

Owned

StockBeneficial Owners of 5% or MoreRobert F.X.
    Sillerman(2)

20,946,500

37.1%Brett
    Torino(3)

13,363,577

24.6%Paul C.
    Kanavos(4)

12,535,009

23.5%The Huff Alternative Fund,
    L.P.(5)

6,739,542

12.9%Directors and Continuing and Resigning Named Executive
    Officers (not otherwise included above):Harvey
    Silverman(6)

2,434,161

4.6%Barry A.
    Shier(7)

2,107,145

3.9%Mitchell J.
    Nelson(8)

275,571

*David M. Ledy

45,725

*Michael J. Meyer

32,695

*Bryan E. Bloom



*John D. Miller



*Robert Sudack

118,400

*All directors and continuing and resigning executive officers as
    a group (12
    individuals)(9)

41,043,111

69.8%   *
    
    Represents less than 1%.(1)
    
    Except as otherwise set forth below, the business address and
    telephone number of each of the persons listed above is
    c/o FX
    Real Estate and Entertainment Inc., 650 Madison Avenue, 
    New York, New York 10022, telephone
    (212) 838-3100.(2)
    
    Includes: (i) 14,471,972 shares of common stock owned
    directly by Mr. Sillerman (consisting of:
    (A) 13,271,972 shares of common stock owned of record
    by Mr. Sillerman; and (B) 1,200,000 shares of
    common stock issuable upon the exercise of presently exercisable
    stock options held by Mr. Sillerman that are exercisable at
    $20.00 per share) and (ii) 6,474,528 shares of common
    stock owned indirectly by Mr. Sillerman (consisting of:
    (A) 766,917 shares of common stock owned of 21




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record by Sillerman Capital Holdings, L.P., which
    Mr. Sillerman controls through a trust for the benefit of
    his descendents; (B) 300,000 shares of common stock
    owned of record by Laura Baudo Sillerman,
    Mr. Sillermans spouse; and
    (C) 5,407,611 shares of common stock owned of record
    by Atlas Real Estate Funds, Inc., of which Mr. Sillerman is
    a director, executive officer and controlling stockholder).(3)
    
    Includes: (i) 256,238 shares of common stock owned
    directly by Mr. Torino (consisting of:
    (A) 176,238 shares of common stock owned of record by
    Mr. Torino; and (B) 80,000 shares of common stock
    issuable upon the exercise of presently exercisable stock
    options held by Mr. Torino that are exercisable at $20.00
    per share) and (ii) 13,107,339 shares of common stock
    owned indirectly by Mr. Torino (consisting of:
    (A) 5,556,870 shares of common stock owned of record
    by the Brett Torino, ONIROT Living Trust dated 6/20/2000, a
    living trust formed for the sole benefit of Mr. Torino;
    (B) 2,142,858 shares of common stock issuable upon the
    exercise of presently exercisable warrants held by TTERB Living
    Trust, a living trust formed for the sole benefit of
    Mr. Torino, half of which are exercisable at $4.50 per
    share and the other half of which are exercisable at $5.50 per
    share; and (C) 5,407,611 shares of common stock owned
    of record by Atlas Real Estate Funds, Inc., of which
    Mr. Torino is a director, executive officer and controlling
    stockholder).(4)
    
    Includes: (i) 7,127,398 shares of common stock owned
    directly by Mr. Kanavos (consisting of:
    (A) 354,254 shares of common stock owned of record by
    Mr. Kanavos; (B) 4,980,284 shares of common stock
    owned of record by Mr. Kanavos and his spouse, Dayssi
    Olarte de Kanavos, as joint tenants;
    (C) 500,000 shares of common stock owned of record by
    the Paul C. Kanavos 2008 GRAT; (D) 1,142,860 shares of
    common stock issuable upon the exercise of presently exercisable
    warrants held by Mr. Kanavos and his spouse, half of which
    are exercisable at $4.50 per share and the other half of which
    are exercisable at $5.50 per share; and
    (E) 150,000 shares of common stock issuable upon the
    exercise of presently exercisable stock options held by
    Mr. Kanavos that are exercisable at $20.00 per share) and
    (ii) 5,407,611 shares of common stock owned indirectly
    by Mr. Kanavos (consisting of the shares of common stock
    owned of record by Atlas Real Estate Funds, Inc., of which
    Mr. Kanavos is a director, executive officer and
    controlling stockholder). Mr. Kanavos beneficial
    ownership excludes 500,000 shares of Common Stock owned of
    record by his spouses GRAT, the Dayssi Olarte de Kanavos
    2008 GRAT.(5)
    
    Held of record by The Huff Alternative Fund, L.P. and one of its
    affiliated limited partnerships (together, the Huff
    Entities). William R. Huff possesses the sole power to
    vote and dispose of all the shares of common stock held by the
    Huff Entities, subject to the internal screening procedures and
    other securities law compliance policies that from time to time
    require Mr. Huff to delegate to one or more employees of
    the Huff Entities transaction and/or securities disposition
    authority with respect to certain entities, including our
    company. All such employees serve under the ultimate direction,
    control and authority of Mr. Huff. Thus, Mr. Huff is
    deemed to beneficially own 6,739,542 shares of common
    stock. The address of the Huff Entities and Mr. Huff is 67
    Park Place, Morristown, New Jersey 07960.(6)
    
    Includes: (i) 1,384,119 shares of common stock owned
    of record by Mr. Silverman; (ii) 478,612 shares
    of common stock owned of record by Silverman Partners, L.P., of
    which Mr. Silverman is the sole general partner; and
    (iii) 571,430 shares of common stock underlying
    presently exercisable warrants owned of record by Silverman
    Partners, L.P. These warrants are exercisable at prices of $4.50
    per share for 285,715 of the underlying shares and $5.50 per
    share for 285,715 of the underlying shares.(7)
    
    Includes: (i) 785,715 shares of common stock owned of
    record by Mr. Shier, (ii) 750,000 shares of
    common stock issuable upon the exercise of presently exercisable
    stock options held by Mr. Shier that are exercisable at
    $10.00 per share and (iii) 571,430 shares of common
    stock underlying presently exercisable warrants owned of record
    by Mr. Shier. These warrants are exercisable at prices of
    $4.50 per share for 285,715 of the underlying shares and $5.50
    per share for 285,715 of the underlying shares. 22




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(8)
    
    Includes: (i) 95,571 shares of common stock owned of
    record by a family limited liability company, of which
    Mr. Nelson is the sole manager,
    (ii) 100,000 shares of common stock underlying
    presently exercisable warrants owned of record by Mr. and
    Mrs. Nelson that are exercisable at prices of $4.50 per
    share for 50,000 of the underlying shares and $5.50 per share
    for 50,000 of the underlying shares, and
    (iii) 80,000 shares of common stock issuable upon the
    exercise of presently exercisable stock options held by
    Mr. Nelson that are exercisable at $20.00 per share.(9)
    
    Includes an aggregate of 6,788,578 shares of common stock
    underlying presently exercisable warrants and options described
    above in notes 3, 4, 6, 7 and 8.  ITEM 13.
    CERTAIN
    RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    Related
    Parties
  
    Robert F.X. Sillerman, our Chairman and Chief Executive Officer,
    (i) is the Chairman and Chief Executive Officer of CKX,
    Inc., (ii) owns approximately 28% of the outstanding common
    stock of CKX, and (iii) owns approximately 29.3% of the
    outstanding equity of Flag Luxury Properties.
    Paul Kanavos, our President, (i) is the Chairman and Chief
    Executive Officer of Flag Luxury Properties, and (ii) owns
    approximately 29.3% of the outstanding equity of Flag Luxury
    Properties.
    Flag Luxury Properties holds a $15 million priority
    preferred distribution as more fully described below.
    CKX, Inc. is party to a shared services agreement with us as
    more fully described below.  Priority
    Preferred Distribution
    Rights
    Offering and Related Investment Agreements
     23




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and/or
    Terminated
    License Agreements
       24




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and/or
  Conditional
    Option Agreement and EPE License Agreement Amendment with
    19X
    1 2
    Shared
    Services Agreement
       25




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provided, however and/or provided further, however
    Flag
    Shared Services Arrangement
        Stockholder
    Lock-Ups
  lock-up lock-up
  Related
    Party Indebtedness
   26




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19X
    Payment
    650
    Madison Avenue Office Space
      Private
    Placement of Units
   27




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Board
    Decisions and Certain Conflicts of Interest
    Independent
    Directors
      ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES  Services
    Provided by the Independent Registered Public Accounting Firm
    and Fees Paid
    2008


2007Audit Fees(1)

$
1,050,600


$
2,454,300Audit-Related FeesTax Fees(2)


265,300



286,900All Other FeesTotal

$
1,315,900


$
2,741,200     (1)
    
    Audit Fees were for audit services, including (i) the
    annual audit (including required quarterly reviews) and other
    procedures required to be performed by the independent auditors
    to be able to form an opinion on the Companys consolidated
    financial statements, (ii) consultation with management as
    to the accounting or disclosure treatment of transactions or
    events, and (iii) services associated with SEC registration
    statements.(2)
    
    Tax Fees were for services related to (i) tax compliance
    and (ii) tax planning and tax advice.  Audit
    Committee Pre-Approval of Services Provided by the Independent
    Registered Public Accounting Firm
   28




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PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENTS AND SCHEDULES    (1) Financial Statements:
    (2) Financial Statement Schedule:
        (3) Exhibits
    ExhibitNumber

Description31
.1

Certification of Principal Executive Officer31
.2

Certification of Principal Accounting Officer  29




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SIGNATURES
    FX Real
    Estate and Entertainment Inc.
 By:

/s/ ROBERT F.X. SILLERMAN

April 30, 2009Robert F.X. Sillerman 
    Chief Executive Officer and Chairman of the BoardBy:

/s/ STEPHEN A. JARVIS

April 30, 2009Stephen A. Jarvis
    Principal Accounting Officer  30




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INDEX TO
    EXHIBITS
    ExhibitNumber

Description31
.1

Certification of Principal Executive Officer31
.2

Certification of Principal Accounting Officer     31