##### Table of Contents





UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C.
    20549
  FORM 10-K
  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
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      Documents Incorporated by Reference:




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##### 





FX Real
    Estate and Entertainment Inc.
  Annual
    Report on
    Form 10-K
  December 31,
    2008
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


10Item 1B.


Unresolved Staff Comments


16Item 2.


Properties


16Item 3.


Legal Proceedings


16Item 4.


Submission of Matters to a Vote of Security
    Holders


16PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


17Item 6.


Selected Financial Data


19Item 7.


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


21Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


33Item 8.


Financial Statements and Supplementary Data


34Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


62Item 9A(T).


Controls and Procedures


62Item 9B.


Other Information


63PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


64Item 11.


Executive Compensation


64Item 12.


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


64Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


64Item 14.


Principal Accountant Fees and Services


64PART IVItem 15.


Exhibits and Financial Statement Schedule


65EX-21.1: LIST OF SUBSIDIARIESEX-23.1: CONSENT OF ERNST & YOUNG LLPEX-23.2 CONSENTEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  In this Annual Report on
    Form 10-K,
    the words we, us, our,
    FXRE, and the Company collectively refer
    to FX Real Estate and Entertainment Inc., and its consolidated
    subsidiaries, FX Luxury Realty, LLC, BP Parent, LLC, Metroflag
    BP, LLC and Metroflag Cable, LLC. In August 2008, FX Luxury
    Realty, LLC changed its name to FX Luxury, LLC, BP Parent, LLC
    changed its name to FX Luxury Las Vegas Parent, LLC, Metroflag
    BP, LLC changed its name to FX Luxury Las Vegas I, LLC and
    Metroflag Cable, LLC changed its name to FX Luxury Las Vegas II,
    LLC. The words Metroflag or Metroflag
    entities refer to FX Luxury Realty and its predecessors,
    including BP Parent, LLC, Metroflag BP, LLC, Metroflag Cable,
    LLC, Metroflag Polo, LLC, CAP/TOR, LLC, Metroflag SW, LLC,
    Metroflag HD, LLC and Metroflag Management, LLC, the predecessor
    entities through which our historical business was conducted
    prior to September 27, 2007. Las Vegas
    subsidiaries refers to BP Parent, LLC, Metroflag BP, LLC
    and Metroflag Cable, LLC, each as renamed as indicated above.
    Some of the descriptive material in this Annual Report on
    Form 10-K
    refers to the assets, liabilities, operations, results,
    activities or other attributes of the historical business
    conducted by the Metroflag entities.
  Financial
    Condition of the Company
    The
    Company
  The Las
    Vegas Property
        Parcel 1.
  Parcel 2.
  Parcel 3.




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Parcel 4.
  Parcel 5.
  Parcel 6.
  Mortgage
    Loan Default
          and/or




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Terminated
    License Agreements
      and/or
  Formation
    of the Company




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##### Table of Contents



CKX
    Investment
          Terminated
    License Agreements
    Metroflag
    Acquisition




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The
    Repurchase Agreement and Contingently Redeemable Stock
    Classification and Measurement of Redeemable Securities
  30-day
  Rights
    Offering and Related Investment Agreements




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and/or
    Conditional
    Option Agreement and EPE License Agreement Amendment with
    19X
    7 1/2 years
    Private
    Placement of Units
    Intellectual
    Property




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##### Table of Contents



Employees
    Company
    Organization
  (212) 838-3100.
  Available
    Information
  1-800-SEC-0330 http://www.sec.gov.
  Form 10-K, Form 10-Q, Form 8-K




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##### Table of Contents



ITEM 1A.
    RISK FACTORS    Risks
    Related to Our Business
  Our
    Las Vegas subsidiaries are in default under the
    $475 million mortgage loan secured by the Las Vegas
    property.
                The
    Las Vegas property, which is substantially our entire business,
    is particularly sensitive to reductions in discretionary
    consumer spending as a result of the financial crisis and global
    recession.




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The
    financial crisis and global recession has adversely affected and
    may continue to adversely affect our ability to repay, refinance
    or extend the past due $475 million mortgage loan and fund
    our short-term liquidity needs.
    Even
    if we are able to raise additional financing, we might not be
    able to obtain it on terms that are not unduly expensive or
    burdensome to us or disadvantageous to our existing
    stockholders.
  and/or
  Our
    independent registered public accounting firm has rendered a
    report expressing substantial doubt as to our ability to
    continue as a going concern.
  and/or
  The
    concentration of ownership of our capital stock with our
    affiliates will limit your ability to influence corporate
    matters.
  and/or
  There
    are conflicts of interest in our relationship with Flag Luxury
    Properties and its affiliates, which could result in decisions
    that are not in the best interests of our
    stockholders.
    
    Certain of our employees, including Mr. Kanavos, our
    President, are permitted to devote a portion of their time to
    providing services for or on behalf of Flag Luxury Properties.
    Flag Luxury Properties holds a $15 million priority
    preferred distribution right in FX Luxury Realty which entitles
    it to receive an aggregate amount of $15 million (together
    with an accrued priority return of $0.4 million as of
    December 31, 2008) prior to any distributions of cash
    by FX Luxury Realty from the proceeds of certain predefined
    capital transactions. Until the preferred




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distribution is paid in full, we are required to use the
    proceeds of certain predefined capital transactions to pay the
    amount then owed to Flag Luxury Properties.  Form 10-K.
  We
    have potential business conflicts with certain of our executive
    officers because of their relationships with CKX and/or Flag
    Luxury Properties and their ability to pursue business
    activities for themselves and others that may compete with our
    business activities.
    
    Mr. Sillermans cross-ownership and dual management
    responsibilities relating to CKX, Flag Luxury Properties and us;
    Mr. Kanavos cross-ownership and dual management
    responsibilities relating to Flag Luxury Properties and us;
    Employment agreements with certain of our executive officers
    specifically provide that a certain percentage of their business
    activities may be devoted to Flag Luxury Properties or CKX; and
    Messrs. Sillerman and Kanavos will be entitled to receive
    their pro rata participation, based on their ownership in Flag
    Luxury Properties, of the $15 million priority distribution
    of cash from the proceeds of certain predefined capital
    transactions when received by Flag Luxury Properties.    We
    have entered into a number of related party transactions with
    CKX and Flag Luxury Properties and their affiliates on terms
    that some stockholders may consider not to be in their best
    interests.




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We may
    lose the services of our key personnel, including certain senior
    executives, if we are not able to satisfy our payment
    obligations under their agreements.
    Terrorism
    and the uncertainty of war, as well as other factors affecting
    discretionary consumer spending, may harm our future operating
    results.
  and/or
    We are
    subject to environmental regulation, which creates uncertainty
    regarding future environmental expenditures and
    liabilities.
  and/or
    We
    continue to need to enhance our internal controls and financial
    reporting systems to comply with the Sarbanes-Oxley Act of
    2002.




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Risks
    Related to Our Common Stock
  Substantial
    amounts of our common stock and other equity securities could be
    sold in the near future, which could depress our stock
    price.
      We do
    not anticipate paying cash dividends on our common stock in the
    foreseeable future, and the lack of dividends may have a
    negative effect on our stock price.
    Our
    issuance of additional shares of our common stock, or options or
    warrants to purchase those shares, would dilute proportionate
    ownership and voting rights.
        We may
    not be able to maintain our NASDAQ Global Market
    listing.




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Certain
    provisions of Delaware law and our charter documents could
    discourage a takeover that stockholders may consider
    favorable.
    
    Our board of directors has the right to elect directors to fill
    a vacancy created by the expansion of the board of directors or
    the resignation, death or removal of a director, subject to the
    right of the stockholders to elect a successor at the next
    annual or special meeting of stockholders, which limits the
    ability of stockholders to fill vacancies on our board of
    directors.
    Our stockholders may not call a special meeting of stockholders,
    which would limit their ability to call a meeting for the
    purpose of, among other things, voting on acquisition proposals.
    Our by-laws may be amended by our board of directors without
    stockholder approval, provided that stockholders may repeal or
    amend any such amended by-law at a special or annual meeting of
    stockholders.
    Our by-laws also provide that any action required or permitted
    to be taken by our stockholders at an annual meeting or special
    meeting of stockholders may not be taken by written action in
    lieu of a meeting.
    Our certificate of incorporation does not provide for cumulative
    voting in the election of directors, which could limit the
    ability of minority stockholders to elect director candidates.
    Stockholders must provide advance notice to nominate individuals
    for election to the board of directors or to propose matters
    that can be acted upon at a stockholders meeting. These
    provisions may discourage or deter a potential acquiror from
    conducting a solicitation of proxies to elect the
    acquirors own slate of directors or otherwise attempting
    to obtain control of our company.
    Our board of directors may authorize and issue, without
    stockholder approval, shares of preferred stock with voting or
    other rights or preferences that could impede the success of any
    attempt to acquire our company.




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##### Table of Contents



ITEM 1B.
    UNRESOLVED STAFF COMMENTS   ITEM 2.
    PROPERTIES    Location

Name of Property

Type/Use of Property

Approximate Size

Owned or LeasedLas Vegas, NV

Corporate Offices

Office Operations

10,709 sq. ft.

Lease expires in 2013Las Vegas, NV

Commercial Property

Land and Building

17.72 acres

Owned (1)     (1)
    
    Our Las Vegas subsidiaries are in default of the
    $475 million mortgage loan on the Las Vegas property for
    failure to repay the amounts outstanding on the due date. ITEM 3.
    LEGAL PROCEEDINGS       ITEM 4.
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information
    2008High


LowThe NASDAQ Global
    Market®Quarters EndedDecember 31, 2008

$
1.03


$
0.13September 30, 2008

$
2.02


$
1.04June 30, 2008

$
6.07


$
1.75March 31, 2008

$
7.88


$
4.65     Dividend
    Policy
    Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    (a)Number ofSecurities to be


(b)Issued Upon


Weighted-Average


(c)Exercise of


Exercise Price of


Number ofOutstanding


Outstanding


SecuritiesOptions,


Options,


RemainingWarrants


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










   Form 10-K.




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Performance
    Graph
  1-year
  COMPARISON OF 1
    YEAR CUMULATIVE TOTAL RETURN*
 Among
    FX Real Estate & Entertainment Inc., The NASDAQ
    Composite Index
 And
    The DJ Wilshire Real Estate Holding & Development Index
  
  *$100
    invested on 1/10/08 in stock or 12/31/07 in index, including
    reinvestment of dividends.
 Fiscal
    year ending December 31.
  Copyright©

    2009 Dow Jones & Co. All rights reserved.
  1/10/08


1/08


2/08


3/08


4/08


5/08


6/08


7/08FX Real Estate & Entertainment Inc.


100.00



84.00



75.87



78.40



64.13



52.13



25.33



24.40NASDAQ Composite


100.00



89.90



85.98



85.97



91.18



95.31



86.89



86.85DJ Wilshire Real Estate Holding & Development


100.00



97.30



88.68



87.30



88.53



90.44



76.29



74.58   8/08


9/08


10/08


11/08


12/0816.93



13.87



9.20



4.53



2.0088.05



77.14



63.27



56.66



58.3578.19



67.18



46.22



38.74



37.84   The
    stock price performance included in this graph is not
    necessarily indicative of future stock price
    performance.




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##### Table of Contents





ITEM 6. SELECTED
    FINANCIAL DATA        (Amounts in thousands, except share information)Metroflag (Predecessor)



FX Real Estate and Entertainment, IncJanuary 1, 2007 



May 11,2007 


Year EndedYear Ended December 31,


May 10,



December 31,


December 31,2004


2005


2006


2007



2007 (a)


2008Statement of Operations Data:Revenue

$
10,703


$
4,888


$
5,581


$
2,079



$
3,070


$
6,009Operating expenses (excluding depreciation and amortization and
    impairment of land) (b)


7,968



861



1,290



839




30,016



39,048Depreciation and amortization


1,534



379



358



128




116



513Impairment of land (c)























325,080Operating income (loss)


1,201



3,648



3,933



1,112




(27,062
)


(358,632
)Interest income (expense), net


(4,247
)


(15,684
)


(26,275
)


(14,444
)



(30,657
)


(48,654
)Other income (expense)



















(6,358
)


(41,670
)Loss from retirement of debt


(5,000
)


(2,967
)






(3,507
)







Loss before equity in earnings (loss) of affiliate, minority
    interest and incidental operations


(8,046
)


(15,003
)


(22,342
)


(16,839
)



(64,077
)


(448,956
)Equity in earnings (loss) of affiliate



















(4,969
)


Minority interest



















680



22Loss from incidental operations(d)






(9,242
)


(17,718
)


(7,790
)



(9,373
)


(12,881
)Net loss

$
(8,046
)

$
(24,245
)

$
(40,060
)

$
(24,629
)


$
(77,739
)

$
(461,815
)Basic and diluted loss per common share


















$
(1.98
)

$
(9.67
)Average number of common shares outstanding



















39,290,247



47,773,323     (a)
    
    For the period May 11, 2007 to July 5, 2007, we
    accounted for our interest in Metroflag under the equity method
    of accounting because we did not have control with our then 50%
    ownership interest. Effective July 6, 2007, with our
    purchase of the 50% of Metroflag that we did not already own, we
    consolidated the results of Metroflag.(b)
    
    In 2005, Metroflag adopted a formal redevelopment plan covering
    certain of the properties which resulted in the operations
    relating to these properties being reclassified as incidental
    operations in accordance with Statement of Financial Accounting
    Standards No. 67, Accounting for the Costs and Initial
    Operations of Real Estate Projects. In the fourth quarter of
    2007, the Company recorded a write-off of approximately
    $12.7 million for capitalized costs that were deemed to be
    not recoverable based on changes made to the Companys
    redevelopment plans for the Las Vegas property. The year ended
    December 31, 2008 also




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##### Table of Contents



included an impairment charge of $10.7 million related to
    the write-off of capitalized development costs as a result of
    the Companys determination in the third quarter of 2008
    not to proceed with our originally proposed plan for the
    redevelopment plan of the Las Vegas property.(c)
    
    As a result of the current global recession and financial crisis
    and based upon a valuation report obtained for the Las Vegas
    property from an independent appraisal firm combined with
    certain assumptions made by management, the Company recorded an
    impairment charge to land of $325.1 million. This charge
    reduced the carrying value of the Las Vegas property to its
    estimated fair value of $218.8 million which management
    believes to be reasonable.(d)
    
    In late September 2008, the Company determined not to proceed
    with its originally proposed plan for the redevelopment of the
    Las Vegas property and to continue the sites current
    commercial leasing activities until such time as an alternative
    development plan, if any, is adopted. As a result, effective
    October 1, 2008, the Company is no longer classifying these
    operations of Metroflag as incidental operations and all
    operations have been included as part of income (loss) from
    operations.  Metroflag (Predecessor)



FX Real Estate and Entertainment Inc.As of December 31,



As of December 31,(amounts in thousands)

2004


2005


2006



2007


2008Balance Sheet Data:Cash and cash equivalents

$
1,741


$
3,457


$
1,643



$
2,559


$
2,659Other current assets


1,178



4,255



13,020




112,550



35,548Investment in real estate


89,739



202,639



280,574




561,653



218,800Total assets


103,599



221,084



296,607




677,984



258,070Current liabilities (excluding current portion of debt)


1,671



2,613



7,119




24,945



22,262Debt


84,270



200,705



313,635




512,694



475,391Total liabilities


87,201



205,665



321,346




537,830



497,962Members equity/Stockholders equity


16,398



15,419



(24,739
)



139,974



(239,892
)   FORWARD
    LOOKING STATEMENTS
  Form 10-K




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following managements discussion and analysis of
    financial condition and results of operations of the Company
    (and its predecessor) should be read in conjunction with the
    historical audited consolidated financial statements and
    footnotes of Metroflag and the Companys historical audited
    consolidated financial statements and notes thereto included
    elsewhere in this Annual Report. Our future results of
    operations may change materially from the historical results of
    operations reflected in our historical audited consolidated
    financial statements.




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FX Real
    Estate and Entertainment Operating Results




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##### Table of Contents



Metroflag
    Operating Results
        Metroflag
    Results for the Year Ended December 31, 2008 and
    2007
  Year


January 1,


May 11,Ended


2007


2007December 31,


Through


through(amounts in thousands)

2008


May 10, 2007


December 31, 2007


2007


VarianceRevenue

$
6,009


$
2,079


$
4,012


$
6,091


$
(82
)Operating expenses (excluding depreciation and amortization and
    impairment of land)


(18,509
)


(839
)


(13,712
)


(14,551
)


(3,958
)Impairment of land


(325,080
)














(325,080
)Depreciation and amortization


(513
)


(128
)


(171
)


(299
)


(214
)Income (loss) from operations


(338,093
)


1,112



(9,871
)


(8,759
)


(329,334
)Interest expense, net


(47,599
)


(14,444
)


(37,294
)


(51,738
)


4,139Loss from early retirement of debt






(3,507
)






(3,507
)


3,507Loss from incidental operations


(12,881
)


(7,790
)


(12,371
)


(20,161
)


7,280Net loss

$
(398,573
)

$
(24,629
)

$
(59,536
)

$
(84,165
)

$
(314,408
)




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##### Table of Contents



Revenue
    Operating
    Expenses
   corporate-funded
  Depreciation
    and Amortization Expense
     Impairment
    of Land
     Interest
    Income/Expense
     Loss
    from Incidental Operations




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##### Table of Contents



Metroflag
    Results for the Years Ended December 31, 2007 and
    2006
  January 1,


May 11,2007


2007Through


through(amounts in thousands)

May 10, 2007


December 31, 2007


2007


2006


VarianceRevenue

$
2,079


$
4,012


$
6,091


$
5,581


$
510Operating expenses


(839
)


(13,712
)


(14,551
)


(1,290
)


(13,261
)Depreciation and amortization


(128
)


(171
)


(299
)


(358
)


59Income from operations


1,112



(9,871
)


(8,759
)


3,933



(12,692
)Interest expense, net


(14,444
)


(37,294
)


(51,738
)


(26,275
)


(25,463
)Loss from early retirement of debt


(3,507
)






(3,507
)






(3,507
)Loss from incidental operations


(7,790
)


(12,371
)


(20,161
)


(17,718
)


(2,443
)Net loss

$
(24,629
)

$
(59,536
)

$
(84,165
)

$
(40,060
)

$
(44,105
)   Revenue
    Operating
    Expenses
     Depreciation
    and Amortization Expense
     Interest
    Income/Expense
     Loss
    from Early Retirement of Debt
     Loss
    from Incidental Operations
     Liquidity
    and Capital Resources
  Introduction




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Rights Offering 
  Shier Stock Purchase 
  Private Placement of Units 
  Riv Loan
  CKX Line of Credit




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##### Table of Contents



Bear Stearns Margin Loan
  Preferred Priority Distribution
  Cash Flow
    for the Year Ended December 31, 2008
  Operating
    Activities
    Investing
    Activities
     Financing
    Activities
     Cash
    Flows for the period from May 11, 2007 to December 31,
    2007
  Operating
    Activities




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##### Table of Contents



Investing
    Activities
    Financing
    Activities
    Metroflag 
    Historical Cash Flow for the year ended December 31,
    2006
  Operating
    Activities
    Investing
    Activities
        Financing
    Activities
      Uses of
    Capital
    Capital
    Expenditures




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##### Table of Contents



Dividends
    Commitments
    and Contingencies
    Contractual
    Obligations
    Payments Due by Period(amounts in thousands)

2009


2010


2011


2012


2013


Thereafter


TotalDebt (including interest) (a)

$
476,342


$



$



$



$



$



$
476,342Non-cancelable operating leases


556



497



511



517



216







2,297Employment contracts


4,990



5,201



4,901



5,105



759







20,956Licensing agreements (b)


























Total

$
481,888


$
5,698


$
5,412


$
5,622


$
975


$



$
499,595     (a)
    
    Interest on the mortgage loan was included through
    January 6, 2009, the date the mortgage loan matured. The
    Company has not included interest subsequent to January 6,
    2009 on the mortgage loan as it is in preliminary discussions
    with the first lien lenders and the second lien lenders
    regarding potential solutions to the existing loan defaults. No
    agreement has yet been reached.(b)
    
    As of March 9, 2009, the licensing agreements with Elvis
    Presley Enterprises and Muhammad Ali Enterprises were
    terminated. For additional information about the termination,
    see Item 1. Business  The Company 
    Terminated License Agreements.  Inflation
    Application
    of Critical Accounting Policies
  Marketable
    Securities
  Accounting for Certain Investments in Debt and Equity
    Securities




---



##### Table of Contents



Financial
    Instruments
  Accounting for Derivative Instruments
    and Hedging Activities
    Real
    Estate Investments
    Accounting for the Impairment or
    Disposal of Long-Lived Assets
    
    Loss of certain typical market participants (e.g., large hotel
    and casino operators) given their current financial condition,
    commitments and/or liquidity challenges;
    Discount from the available comparable sales which are primarily
    dated in 2007 and do not fully reflect the continued
    deterioration of the Las Vegas market values;
    Development requirements, and therefore, capital needs, to
    maximize the value and use of the Las Vegas property combined
    with the lack of available financing;
    Location, configuration and zoning of the Las Vegas land, each
    which may make it more or less attractive than other comparable
    properties; and
    Shrinking market and exposure periods in the current environment.  Incidental
    Operations
  Accounting for Costs and Initial
    Operations of Real Estate Projects




---



##### Table of Contents



Income
    Taxes
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
    Share-Based
    Payments
  Share-Based Payment
  Impact of
    Recently Issued Accounting Standards
  , Fair Value
    Measurements Formation of the
    Company
  The
    Fair Value Option for Financial Assets and Financial Liabilities




---



##### Table of Contents



Business Combinations Noncontrolling Interests in Consolidated Financial
    Statements an amendment of ARB No. 51
  Off
    Balance Sheet Arrangements
    Seasonality
   ITEM 7A.
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK    Interest
    Rate Risk
    Foreign
    Exchange Risk




---



##### 



ITEM 8.
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   Table of
    Contents to Financial Statements
 PageFX Real Estate and Entertainment Inc.Reports of Independent Registered Public
    Accounting Firms

35Consolidated Balance Sheets as of
    December 31, 2008 and 2007

38Consolidated Statement of Operations for the year
    ended December 31, 2008 and for the period from
    May 11, 2007 through December 31, 2007, and Combined
    Statements of Operations (Predecessor) for the period from
    January 1, 2007 through May 10, 2007 and the year ended
    December 31, 2006

39Consolidated Statement of Cash Flows for the year
    ended December 31, 2008 and for the period from
    May 11, 2007 through December 31, 2007, and Combined
    Statements of Cash Flows (Predecessor) for the period from
    January 1, 2007 through May 10, 2007 and the year
    ended December 31, 2006

40Consolidated Statement of Stockholders
    Equity for the year ended December 31, 2008 and for the
    period from May 11, 2007 to December 31, 2007 and
    Combined Statement of Members Equity (Predecessor) for the
    period from January 1, 2007 through May 10, 2007 and
    the year ended December 31, 2006

41Notes to Consolidated/Combined Financial
    Statements

42




---



##### Table of Contents



FX Real
    Estate and Entertainment Inc. Report of
    Independent Registered Public Accounting Firm            Ernst &
    Young LLP




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
          Ernst &
    Young LLP




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
          Ernst &
    Young LLP




---



##### Table of Contents



FX Real
    Estate and Entertainment Inc.
  CONSOLIDATED
    BALANCE SHEETS
 (amounts
    in thousands, except share data)
  December 31,


December 31,2008


2007ASSETSCurrent assets:Cash and cash equivalents

$
2,659


$
2,559Restricted cash


29,814



60,350Marketable securities


4,231



43,439Rent and other receivables, net of allowance for doubtful
    accounts of $17 at December 31, 2008 and $368 at
    December 31, 2007


124



1,016Deferred financing costs, net


54



6,714Prepaid expenses and other current assets


1,325



1,031Total current assets


38,207



115,109Investment in real estate:Land


212,624



533,336Building and improvements


32,816



32,710Furniture, fixtures and equipment


730



565Capitalized development costs






6,026Less: accumulated depreciation


(27,370
)


(10,984
)Net investment in real estate


218,800



561,653Acquired lease intangible assets, net


1,063



1,222Total assets

$
258,070


$
677,984LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable and accrued expenses

$
10,321


$
10,809Accrued license fees


10,000



10,000Debt in default  note 5


475,000



475,000Notes payable


391



30,674Due to related parties


1,373



3,022Related party debt






1,020Other current liabilities


532



1,114Unearned rent and related revenue


36



Total current liabilities


497,653



531,639Related party debt






6,000Other long-term liabilities


309



191Total liabilities


497,962



537,830Contingently redeemable stockholders equity






180Stockholders equity (deficit):Preferred stock, $0.01 par value: authorized
    75,000,000 shares, 1 share issued and outstanding at
    December 31, 2008 and none issued and outstanding at
    December 31, 2007






Common stock, $0.01 par value: authorized
    300,000,000 shares, 51,992,417 and 39,290,247 shares
    issued and outstanding at December 31, 2008 and
    December 31, 2007, respectively


520



393Additional
    paid-in-capital


299,142



219,781Accumulated deficit


(539,554
)


(77,739
)Accumulated other comprehensive loss






(2,461
)Total stockholders equity (deficit)


(239,892
)


139,974Total liabilities and stockholders equity (deficit)

$
258,070


$
677,984




---



##### Table of Contents



FX Real
    Estate and Entertainment Inc.
  STATEMENTS
    OF OPERATIONS
 (amounts
    in thousands, except share and per share data)
  PredecessorConsolidated



CombinedPeriod from



Period from



PredecessorConsolidated



May 11, 2007



January 1, 2007



CombinedYear Ended



Through



Through



Year EndedDecember 31, 2008



December 31, 2007



May 10, 2007



December 31, 2006Revenue


$
6,009



$
3,070



$
2,079



$
5,581Operating expenses:License fees



10,000




10,000









Selling, general and administrative expenses



15,158




6,874




421




104Depreciation and amortization expense



513




116




128




358Operating and maintenance



2,592




276




265




776Real estate taxes



615




194




153




410Impairment of land



325,080














Impairment of capitalized development costs



10,683




12,672









Total operating expenses



364,641




30,132




967




1,648Income (loss) from operations



(358,632
)



(27,062
)



1,112




3,933Interest income



386




814




113




2,110Interest expense



(49,040
)



(31,471
)



(14,557
)



(28,385
)Other income (expense)



(41,670
)



(6,358
)








Loss from retirement of debt













(3,507
)



Equity in earnings (losses) of affiliate








(4,969
)








Minority interest



22




680









Loss from incidental operations



(12,881
)



(9,373
)



(7,790
)



(17,718
)Net loss


$
(461,815
)


$
(77,739
)


$
(24,629
)


$
(40,060
)Basic and diluted loss per share


$
(9.67
)


$
(1.98
)Basis and diluted average number of common shares outstanding



47,773,323




39,290,247




---



##### Table of Contents



FX Real
    Estate and Entertainment Inc.STATEMENTS OF CASH FLOWS(amounts in thousands)
  PredecessorConsolidated



CombinedPeriod from



Period from



PredecessorConsolidated



May 11, 2007



January 1, 2007



CombinedYear Ended



Through



Through



Year EndedDecember 31, 2008



December 31, 2007



May 10, 2007



December 31, 2006Cash flows from operating activities:Net loss


$
(461,815
)


$
(77,739
)


$
(24,629
)


$
(40,060
)Adjustments to reconcile net loss to cash provided by operating
    activities:Depreciation and amortization



16,386




10,983




8,472




19,670Deferred financing cost amortization



8,328




6,760




41




3,943Share-based payments



3,172














Loss on exercise of derivative








6,358









Impairment of available-for-sale securities



41,670














Impairment of land



325,080














Impairment of capitalized development costs



10,683




12,672









Equity in loss of an unconsolidated affiliate








4,969




36




Minority interest



(22
)



(680
)








Provision for accounts receivable allowance



(351
)













Changes in operating assets and liabilities:Receivables



575




120




(171
)



(196
)Other current and non-current assets



(135
)



(573
)



(933
)



1,871Accounts payable and accrued expenses



(427
)



2,985




(2,486
)



2,174Accrued license fees








10,000









Due to related parties



(1,650
)



1,188




22




230Unearned revenue



36




(767
)



991




234Other



(271
)



177




27




112Net cash used in operating activities



(58,741
)



(23,547
)



(18,630
)



(12,022
)Cash flows used in investing activities:Restricted cash



45,394




934




11,541




(9,787
)Capitalized development costs



(9,024
)



(1,233
)








Development of real estate including land acquired













(45
)



(5,206
)Acquisitions of real estate



(271
)













(92,396
)Deposits on land purchase


















4,807Purchase of Riviera interests








(21,842
)








Purchase of shares in Riviera








(13,197
)








Purchase of additional interest in Metroflag








(172,500
)








Net cash provided by (used in) investing activities



36,099




(207,838
)



11,496




(102,582
)Cash flows provided by financing activities:Proceeds from private placement of units



7,925














Payment of mortgage loan extension costs



(14,988
)













Repayment of related party debt



(7,054
)













Repayment of notes



(30,284
)













Proceeds from rights offering and investment agreements, net



96,613














Preferred distribution to related party



(31,039
)













Members capital contributions








100,000









(98
)Issuance of common stock



2,570




2,000









Repayment of existing mandatorily redeemable interest


















Deferred financing costs



(1,669
)



(3,738
)



(10,536
)



(41
)Borrowings under loan agreements and notes payable








142,694




306,543




100,866Retirement/repayment of mortgage loans













(295,000
)



Contribution from minority interest



668




593









(Repayments of) proceeds from Members loans








(7,605
)



5,972




12,063Net cash provided by financing activities



22,742




233,944




6,979




112,790Net increase/(decrease) in cash and equivalents



100




2,559




(155
)



(1,814
)Cash and cash equivalents  beginning of period



2,559









1,643




3,457Cash and cash equivalents  end of period


$
2,659



$
2,559



$
1,488




1,643Supplemental cash flow disclosures:Cash paid for interest


$
38,103



$
25,663



$
17,102



$
20,938Non-cash financing and investing activities:Contributions of assets for membership interests


$




$
103,421














---



##### Table of Contents



FX Real
    Estate and Entertainment Inc.
  STATEMENT
    OF STOCKHOLDERS EQUITY (DEFICIT)
 (amounts
    in thousands, except share data)
  Common Stock


Additional





Accumulated OtherMembers Equity


Shares


Amount


Paid-In-Capital


Accumulated Deficit


Comprehensive Loss


TotalBalance at January 1, 2006 
    (Predecessor)

$
15,419






$



$



$



$



$
15,419Capital contributions


11,902























11,902Distributions paid


(12,000
)






















(12,000
)Net loss


(40,060
)






















(40,060
)Balance at December 31, 2006 
    (Predecessor)

$
(24,739
)





$



$



$



$



$
(24,739
)Net loss


(24,629
)






















(24,629
)Balance at May 10, 2007 
    (Predecessor)

$
(49,368
)





$



$



$



$



$
(49,368
)Balance at May 11, 2007

$







$



$



$



$



$
Capital contributions






202







219,781











219,781Reorganization of FXRE






39,290,045



393















393Net loss


















(77,739
)






(77,739
)Unrealized loss on available for sale securities






















(2,461
)


(2,461
)Balance at December 31, 2007

$




39,290,247


$
393


$
219,781


$
(77,739
)

$
(2,461
)

$
139,974Rights offering






9,871,674



99



97,297











97,396Termination of repurchase agreement














180











180Private placement of units






2,264,289



23



7,187











7,187Stock sale






500,000



5



2,565











2,570Flag preferred distribution














(31,039
)










(31,039
)Shares issued to independent directors






66,207







102











102Stock option expense














3,069











3,069Unrealized loss on available for sale securities






















2,461



2,461Net loss


















(461,815
)






(461,815
)Balance at December 31, 2008

$




51,992,417


$
520


$
299,142


$
(539,554
)

$



$
(239,892
)




---



##### Table of Contents



FX Real
    Estate and Entertainment Inc.NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
  1.
    Basis of
    Presentation




---



##### Table of Contents



2.
    Organization
    and Background  Business
    of the Company
      Formation
    of the Company




---



##### Table of Contents



CKX
    Investment
        Terminated
    License Agreements
    Metroflag
    Acquisition




---



##### Table of Contents



The
    Repurchase Agreement and Contingently Redeemable
    Stock
      30-day
  Rights
    Offering and Related Investment Agreements




---



##### Table of Contents



and/or
    Form 10-Q
  Conditional
    Option Agreement with 19X
      Private
    Placement of Units
    3.
    Going
    Concern




---



##### Table of Contents



4.
    Summary
    of Significant Accounting Policies  Cash
    and Cash Equivalents
    Restricted
    Cash
    Marketable
    Securities
  Accounting for Certain Investments in
    Debt and Equity Securities
  Fair
    Value of Financial Instruments
  Accounting for Derivative Instruments and Hedging
    Activities
      Rental
    Revenue




---



##### Table of Contents



Real
    Estate Investments
        Business Combinations
  lease-up
    Accounting for the
    Impairment or Disposal of Long-Lived Assets
    
    Loss of certain typical market participants (e.g., large hotel
    and casino operators) given their current financial condition,
    commitments and / or liquidity challenges;
    Discount from the available comparable sales which are primarily
    dated in 2007 and do not fully reflect the continued
    deterioration of the Las Vegas market values;
    Development requirements, and therefore, capital needs, to
    maximize the value and use of the Las Vegas property combined
    with the lack of available financing;
    Location, configuration and zoning of the Las Vegas land, each
    which may make it more or less attractive than other comparable
    properties; and
    Shrinking market and exposure periods in the current environment.




---



##### Table of Contents



Loss
    Per Share/Common Shares Outstanding
  Earnings Per Share
  Incidental
    Operations
  Accounting for Costs and
    Initial Operations of Real Estate Projects
      PredecessorYear Ended


May 11-


January 1-


Year Ended(amounts in thousands)

December 31,


December 31,


May 10,


December 31,2008


2007


2007


2006Revenues

$
13,474


$
7,854


$
5,326


$
13,688Depreciation


(15,873
)


(10,867
)


(8,343
)


(19,312
)Operating & other


(10,482
)


(6,360
)


(4,773
)


(12,094
)Net loss

$
(12,881
)

$
(9,373
)

$
(7,790
)

$
(17,718
)   Deferred
    Financing Costs
    Share-Based
    Payments
  Share-Based Payment
  Income
    Taxes




---



##### Table of Contents



Risks
    and Uncertainties
    Use of
    Estimates
    Impact
    of Recently Issued Accounting Standards
  , Fair Value
    Measurements Formation of the
    Company
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Business Combinations Noncontrolling Interests in Consolidated Financial
    Statements an amendment of ARB No. 51
  Reclassifications




---



##### Table of Contents



5.
    Debt and
    Notes Payable      Mortgage Loan Default




---



##### Table of Contents



Riv Loan 
  Bear Stearns Loan 
    Predecessor




---



##### Table of Contents



6.
    Related Party Debt
        7.
    Impairment of Land
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  and/or
    
    Loss of certain typical market participants (e.g., large hotel
    and casino operators) given their current financial condition,
    commitments and / or liquidity challenges;
    Discount from the available comparable sales which are primarily
    dated in 2007 and do not fully reflect the continued
    deterioration of the Las Vegas market values;
    Development requirements, and therefore, capital needs, to
    maximize the value and use of the Las Vegas property combined
    with the lack of available financing;
    Location, configuration and zoning of the Las Vegas land, each
    which may make it more or less attractive than other comparable
    properties; and




---



##### Table of Contents




    Shrinking market and exposure periods in the current environment.  8.
    Terminated License Agreements with Related Parties
    
  and/or
  Accounting
    for Minimum Guaranteed License Payments
    9.
    Acquired Lease Intangibles
      December 31, 2008


December 31, 2007AssetsAbove-market leases

$
582


$
582In-place leases


1,320



1,320Accumulated amortization


(839
)


(680
)Net

$
1,063


$
1,222LiabilitiesBelow-market leases

$
111


$
111Accumulated accretion


(98
)


(72
)Net

$
13


$
39




---



##### Table of Contents



Amortization


MinimumExpense


Rent(in thousands)Years Ending December 31,2009

$
63


$
52010


57



52011


52



32012


50



2013


50



   10.
    Derivative Financial Instruments
    11.
    Commitments
    (in thousands)Years Ending December 31,2009

$
5562010


4972011


5112012


5172013


216Thereafter


Total

$
2,297     (in thousands)Year Ending December 31,2009

$
4,9902010


5,2012011


4,9012012


5,1052013


759Thereafter


Total

$
20,956




---



##### Table of Contents



12.
    Stockholders Equity
      13.
    Share-Based
    Payments  Equity
    Incentive Plan
    Executive
    Equity Incentive Plan
    Stock
    Option Grants
  Share-Based Payment No. 96-18, Accounting for Equity Instruments That are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
    Risk-free rate


1.62%Volatility


68.0%Weighted average expected life remaining at December 31,
    2008


5.52 yearsDividend yield


0.0%




---



##### Table of Contents



Risk-free rate


3.28%Volatility


40.0%Weighted average expected life


6.25 yearsDividend yield


0.0%       14.
    Income
    Taxes    Period fromMay 11, 2007throughDecember 31, 2008


December 31, 2007(in thousands)


(in thousands)Current provision (benefit)Federal

$



$
State










Deferred provision (benefit)FederalState










Total income tax expense

$



$
     Period fromMay 11, 2007throughDecember 31, 2008


December 31, 2007(in thousands)


(in thousands)Expense (benefit) at statutory federal rate

$
(161,643
)

$
(27,209
)Non-consolidated subsidiaries


67



2,609Income/loss taxed directly to FXLR LLCs historical partners






10,165Valuation allowance


161,576



14,435Income tax expense

$



$





---



##### Table of Contents



December 31, 2008


December 31, 2007(in thousands)


(in thousands)Deferred income tax assets:Land

$
90,328


$
1,400Fixed assets


22,077



(7,700
)Deferred revenue


121



288Bad debt


6



129Net operating loss carryforwards


39,944



13,303Marketable securities


14,668



861Other


1,139



Total deferred income tax assets, gross


168,283



8,281Less: valuation allowance


(167,911
)


(7,854
)Total deferred income tax assets, net


372



427Deferred tax liabilities:Acquired lease intangibles


(372
)


(427
)Total deferred income tax liabilities


(372
)


(427
)Total deferred income tax assets (liabilities), net

$



$
       Accounting for
    Uncertainty in Income Taxes
      15.
    Litigation




---



##### Table of Contents








---



##### Table of Contents



16.
    Related
    Party Transactions    Shared
    Services Agreements
        and/or
          and/or




---



##### Table of Contents



Preferred
    Priority Distribution
        17.
    Quarterly
    Financial Information (unaudited)    For The
    Year Ended December 31, 2008
  Quarter Ended


Quarter Ended


Quarter Ended


Quarter EndedAmounts in thousands, except for share information

March 31, 2008


June 30, 2008


September 30, 2008


December 31, 2008


TotalRevenue


$    485



$    486



$    482



$   4,556



$    6,009Operating expenses (excluding depreciation and amortization and
    impairment of land)


7,240



5,830



16,791



9,187



39,048Depreciation and amortization


6



7



7



493



513Impairment of land














325,080



325,080Operating loss


(6,761
)


(5,351
)


(16,316
)


(330,204
)


(358,632
)Interest income (expense), net


(14,221
)


(12,056
)


(9,581
)


(12,796
)


(48,654
)Other expense






(31,585
)


(3,950
)


(6,135
)


(41,670
)Minority interest


2



10







10



22Loss from incidental operations


(4,053
)


(4,968
)


(3,860
)






(12,881
)Net loss


(25,033
)


(53,950
)


(33,707
)


(349,125
)


(461,815
)Basic and diluted loss per common share


$  (0.62
)


$  (1.14
)


$  (0.65
)


$    (6.72
)


$    (9.67
)Average number of common shares outstanding(a)


40,323,586



47,186,090



51,503,841



51,991,735



47,773,323




---



##### Table of Contents



For The
    Period From May 11, 2007 (inception) through
    December 31, 2007
  May 11, 2007 through


Quarter Ended


Quarter EndedAmounts in thousands, except for share information

June 30, 2007


September 30, 2007


December 31, 2007


TotalRevenue

$



$
1,346


$
1,724


$
3,070Operating expenses (excluding depreciation and amortization)


1,838



7,824



20,354



30,016Depreciation and amortization






86



30



116Operating loss


(1,838
)


(6,564
)


(18,660
)


(27,062
)Interest income (expense), net


189



(15,520
)


(15,326
)


(30,657
)Other expense


(377
)


(5,981
)






(6,358
)Equity in earnings (loss) of affiliate


(4,455
)


(514
)






(4,969
)Minority interest


244



335



101



680Loss from incidental operations






(5,113
)


(4,260
)


(9,373
)Net loss


(6,237
)


(33,357
)


(38,145
)


(77,739
)Basic and diluted loss per common share

$
(0.16
)

$
(0.85
)

$
(0.97
)

$
(1.98
)Average number of common shares outstanding(a)


39,290,247



39,290,247



39,290,247



39,290,247     (a)
    
    Average number of common shares outstanding for the interim
    periods reflects the actual shares outstanding at
    December 31, 2007 and reflects the reclassification of the
    Companys common stock on November 29, 2007.  18.
    Subsequent
    Events (unaudited)      ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE   ITEM 9A(T).
    CONTROLS AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)) Rules 13a-15 15d-15,
  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f)




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##### Table of Contents



Changes
    in Internal Control over Financial Reporting
   ITEM 9B.
    OTHER INFORMATION




---



##### Table of Contents



PART III ITEM 10.
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Form 10-K
   ITEM 11.
    EXECUTIVE COMPENSATION  Form 10-K
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K
 ITEM 13.
    CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Form 10-K
 ITEM 14.
    PRINCIPAL ACCOUNTING FEES AND SERVICES  Form 10-K




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##### Table of Contents



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




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##### Table of Contents



Financial
    Statement Schedule
    SCHEDULE II
    FX Real Estate and Entertainment Inc.
    VALUATION AND QUALIFYING ACCOUNTS
    FOR THE YEAR ENDED DECEMBER 31, 2008 AND FOR
    THE PERIOD FROM MAY 11, 2007 THROUGH DECEMBER 31, 2007
    (DOLLARS IN THOUSANDS)
 Balance at


Additions ChargedBeginning of


(Credited) to Costs


Additions Charged





Balance atDescription

Period


And Expenses


to Other Accounts


Deductions


End of PeriodFor The Year Ended December 31, 2008Allowance for doubtful accounts

$
368


$
(351
)

$



$



$
17Deferred taxes valuation allowance


7,854



161,576



(1,519
)






167,911Total

$
8,222


$
161,225


$
(1,519
)

$



$
167,928For The Period From May 11, 2007 Through
    December 31, 2007Allowance for doubtful accounts

$



$
387


$
61


$
(80
)

$
368Deferred taxes valuation allowance






14,435



(6,581
)






7,854Total

$



$
14,822


$
(6,520
)

$
(80
)

$
8,222   Exhibits
    ExhibitNumber

Description3.1

Amended and Restated Certificate of Incorporation of the
    registrant (1)3.2

Amended and Restated By-Laws of the registrant (8)4.1

Certificate of Designation of Non-Voting Preferred Stock of the
    registrant (9)10.1

Membership Interest Purchase Agreement, dated as of June 1,
    2007, by and among FX Luxury Realty, LLC, CKX, Inc. and Flag
    Luxury Properties, LLC (2)10.2

Amendment No. 1 to Membership Interest Purchase Agreement,
    dated as of June 18, 2007, by and among FX Luxury Realty,
    LLC, CKX, Inc. and Flag Luxury Properties, LLC (2)10.3

Repurchase Agreement, dated as of June 1, 2007, by and
    among FX Luxury Realty, LLC, CKX, Inc., Flag Luxury Properties,
    LLC, Robert F.X. Sillerman, Brett Torino and Paul C.
    Kanavos (2)10.4

Amendment to Repurchase Agreement, dated as of June 18,
    2007, by and among FX Luxury Realty, LLC, CKX, Inc., Flag Luxury
    Properties, LLC, Robert F.X. Sillerman, Brett Torino and Paul C.
    Kanavos (2)10.5

Fourth Amended and Restated Limited Liability Company Operating
    Agreement of FX Luxury Realty, LLC, dated as of March 3,
    2008(7)10.6

Amended and Restated Credit Agreement, Senior Secured Term Loan
    Facility (First Lien), dated as of July 6, 2007, among BP
    Parent, LLC, Metroflag BP, LLC, Metroflag Cable, LLC, Credit
    Suisse, Cayman Islands Branch and Credit Suisse Securities (USA)
    LLC (2)10.7

Amended and Restated Credit Agreement, Senior Secured Term Loan
    Facility (Second Lien), dated as of July 6, 2007, among BP
    Parent, LLC, Metroflag BP, LLC, Metroflag Cable, LLC, Credit
    Suisse, Cayman Islands Branch and Credit Suisse Securities (USA)
    LLC (2)10.8

License Agreement, dated as of June 1, 2007, between Elvis
    Presley Enterprises, Inc. and FX Luxury Realty, LLC (2)




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##### Table of Contents



10.9

License Agreement, dated as of June 1, 2007, between Muhammad
    Ali Enterprises LLC and FX Luxury Realty, LLC (2)10.10

Promissory Note, dated June 1, 2007, between FX Luxury Realty,
    LLC, as Payor, and Column Financial, Inc., as Payee (2)10.11

Guaranty, dated as of June 1, 2007, by Robert F.X. Sillerman for
    the benefit of Column Financial, Inc.(2)10.12

Employment Agreement between the registrant and Mitchell J.
    Nelson, dated as of December 31, 2007 (6)10.13

Employment Agreement between the registrant and Paul C. Kanavos,
    dated as of December 31, 2007 (6)10.14

Employment Agreement between the registrant and Thomas P.
    Benson, dated as of January 10, 2008 (6)10.15

Employment Agreement between the registrant and Brett Torino,
    dated as of December 31, 2007 (6)10.16

Form of Waiver of Rights, dated June 1, 2007 (2)10.17

Form of Lock-Up Agreement, dated June 1, 2007 (2)10.18

Promissory Note, dated June 1, 2007, between FX Luxury Realty,
    as Payor, and Flag Luxury Properties, as Payee (3)10.19

Contribution and Exchange Agreement, dated as of September 26,
    2007, between FX Real Estate and Entertainment Inc., CKX, Inc.,
    Flag Luxury Properties, LLC, Richard G. Cushing, as Trustee of
    CKX FXLR Stockholder Distribution Trust I and CKX FXLR
    Stockholder Distribution Trust II, and FX Luxury Realty,
    LLC (2)10.20

Stock Purchase Agreement, dated as of September 26, 2007, by and
    among FX Real Estate and Entertainment Inc., CKX, Inc. and Flag
    Luxury Properties, LLC (2)10.21

Amendment No. 2 to Membership Interest Purchase Agreement, dated
    as of September 27, 2007, by and among FX Luxury Realty, LLC,
    CKX, Inc., Flag Luxury Properties, LLC and FX Real Estate and
    Entertainment Inc.(2)10.22

Amendment No. 2 to Repurchase Agreement, dated as of September
    27, 2007, by and among FX Luxury Realty, LLC, CKX, Inc., Flag
    Luxury Properties, LLC and FX Real Estate and Entertainment
    Inc.(2)10.23

Line of Credit Agreement, dated as of September 26, 2007,
    between CKX, Inc. and FX Real Estate and Entertainment Inc.(2)10.24

Pledge Agreement, dated as of September 26, 2007, by and among
    CKX, Inc., Flag Luxury Properties, LLC and FX Real Estate and
    Entertainment Inc.(2)10.25

Promissory Note, dated September 26, 2007, between CKX, Inc. and
    FX Real Estate and Entertainment Inc.(2)10.26

CKX FXLR Stockholder Distribution Trust I Agreement, by and
    between CKX, Inc. and Richard G. Cushing, as Trustee acting on
    behalf and for the benefit of certain future CKX Beneficiaries,
    dated as of June 18, 2007 (3)10.27

CKX FXLR Stockholder Distribution Trust II Agreement, by
    and between CKX, Inc. and Richard G. Cushing, as Trustee acting
    on behalf and for the benefit of certain future CKX
    Stockholders, dated as of June 18, 2007 (3)10.28

CKX FXLR Stockholder Distribution Trust III Agreement, by
    and between CKX, Inc. and Richard G. Cushing, as Trustee acting
    on behalf and for the benefit of certain future CKX
    Stockholders, dated as of September 27, 2007 (3)10.29

Promissory Note, dated June 1, 2007, between FX Luxury Realty,
    as Payor, and Flag Luxury Properties, as Payee (3)10.30

Employment Agreement between the registrant and Barry Shier,
    dated as of December 31, 2007 (4)10.31

Stock Purchase Agreement by and between FX Real Estate and
    Entertainment Inc. and Barry A. Shier, dated as of January 3,
    2008 (4)10.32

Employment Agreement by and between the registrant and Robert
    F.X. Sillerman, dated as of January 7, 2008 (4)10.33

Shared Services Agreement by and between CKX, Inc. and the
    registrant (1)10.34

Investment Agreement by and between the registrant and The Huff
    Alternative Fund, L.P. and The Huff Alternative Parallel Fund,
    L.P., dated as of January 9, 2008 (5)




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##### Table of Contents



10.35

Investment Agreement by and between the registrant and Robert
    F.X. Sillerman, dated as of January 9, 2008.(5)10.36

2007 Long-Term Incentive Compensation Plan(8)10.37

2007 Executive Equity Incentive Plan (8)10.38

Call Agreement, dated as of March 3, 2008, by and between
    19X, Inc. and the registrant (7)10.39

Letter Agreement, dated March 3, 2008, by and between 19X,
    Inc. and the registrant and Form of Amendment No. 2 to
    License Agreement by and between Elvis Presley Enterprises, Inc.
    and FX Luxury Realty, LLC (7)10.40

Amendment No. 1 to License Agreement, dated as of
    November 16, 2007, between Elvis Presley Enterprises, Inc.
    and FX Luxury Realty, LLC (8)10.41

Amendment No. 1 to License Agreement, dated as of
    November 16, 2007, between Muhammad Ali Enterprises LLC and
    FX Luxury Realty, LLC (8)10.42

First Amendment dated as of March 31, 2008 to Investment
    Agreement by and between FX Real Estate and Entertainment Inc.
    and The Huff Alternative Fund, L.P. and The Huff Alternative
    Parallel Fund, L.P., dated as of January 9, 2008 (9)10.43

First Amendment dated as of March 31, 2008 to Investment
    Agreement by and between FX Real Estate and Entertainment Inc.
    and Robert F.X. Sillerman, dated as of January 9,
    2008 (10)10.44

Second Amendment, dated as of May 13, 2008, to Investment
    Agreement by and between FX Real Estate and Entertainment Inc.
    and The Huff Alternative Fund, L.P. and The Huff Alternative
    Parallel Fund, L.P., dated as of January 9, 2008 (11)10.45

Registration Rights Agreement, dated as of May 13, 2008, by
    and between FX Real Estate and Entertainment Inc. and The Huff
    Alternative Fund, L.P. and The Huff Alternative Parallel Fund,
    L.P. (11)10.46

Form of Subscription Agreement (12)10.47

Form of $4.50 Warrant(12)10.48

Form of $5.50 Warrant(12)10.49

Form of Option Agreement for FX Real Estate and Entertainment
    Inc. 2007 Long-Term Incentive Compensation Plan (13)10.50

Form of Option Agreement for FX Real Estate and Entertainment
    Inc. 2007 Executive Equity Incentive Plan (13)10.51

Termination, Settlement and Release Agreement entered into
    March 9, 2009 by and among FX Luxury Realty, LLC, FX Real
    Estate and Entertainment Inc., Elvis Presley Enterprises, Inc.
    and Muhammad Ali Enterprises, LLC (14)14.1

Code of Ethics (8)21.1

List of Subsidiaries23.1

Consent of Ernst & Young LLP relating to the
    registrants Registration Statement on Form S-8
    (Registration No. 333-150936)23.2

Consent of Ernst & Young LLP relating to the
    registrants Registration Statement on Form S-8
    (Registration No. 333-150936)31.1

Certification of Principal Executive Officer.31.2

Certification of Principal Accounting Officer32.1

Section 1350 Certification of Principal Executive Officer32.2

Section 1350 Certification of Principal Accounting Officer     
    
    Filed herewith(1)
    
    Incorporated by reference to Amendment No. 4 to the
    registrants Registration Statement on Form S-1
    (Registration No. 333-145672), filed with the Commission on
    December 6, 2007.




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##### Table of Contents



(2)
    
    Incorporated by reference to Amendment No. 1 to the
    registrants Registration Statement on Form S-1
    (Registration No. 333-145672), filed with the Commission on
    October 9, 2007.(3)
    
    Incorporated by reference to Amendment No. 2 to the
    registrants Registration Statement on Form S-1
    (Registration No. 333-145672), filed with the Commission on
    November 13, 2007.(4)
    
    Incorporated by reference from the registrants Current
    Report on Form 8-K dated January 9, 2008.(5)
    
    Incorporated by reference from the registrants Current
    Report on Form 8-K dated January 10, 2008(6)
    
    Incorporated by reference from the registrants
    Registration Statement on Form S-1 (Registration
    No. 333-149032), filed with the Commission on
    February 4, 2008(7)
    
    Incorporated by reference to Amendment No. 1 to the
    registrants Registration Statement on Form S-1
    (Registration No. 333-149032), filed with the Commission on
    March 3, 2008(8)
    
    Incorporated by reference from the registrants Annual
    Report on Form 10-K for the fiscal year ended December 31,
    2007(9)
    
    Incorporated by reference from the registrants Current
    Report on Form 8-K dated March 31, 2008(10)
    
    Incorporated by reference from the registrants Quarterly
    Report on Form 10-Q for the quarterly period ended
    March 31, 2008(11)
    
    Incorporated by reference from the registrants Quarterly
    Report on Form 10-Q for the quarterly period ended June 30,
    2008(12)
    
    Incorporated by reference from the registrants Current
    Report on Form 8-K dated July 17, 2008(13)
    
    Incorporated by reference from the registrants Current
    Report on Form 8-K dated September 29, 2008(14)
    
    Incorporated by reference from the registrants Current
    Report on Form 8-K dated March 9, 2009  Form 10-K




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##### Table of Contents



SIGNATURES
    FX Real
    Estate and Entertainment Inc.
  By:

/s/  ROBERT
    F.X. SILLERMANRobert
    F.X. Sillerman
    Chief Executive Officer and Chairman of the Board

March 31, 2009By:

/s/  STEPHEN
    A JARVISPrincipal
    Accounting Officer

March 31, 2009     By:

/s/  ROBERT
    F.X. SILLERMAN Robert
    F.X. Sillerman, Chairman of the Board

March 31, 2009By:

/s/  PAUL
    C. KANAVOS Paul
    C. Kanavos, Director

March 31, 2009By:

/s/  BARRY
    A. SHIER Barry
    A. Shier, Director

March 31, 2009By:

/s/  MICHAEL
    MEYER Michael
    Meyer, Director

March 31, 2009By:

/s/  DAVID
    M. LEDY David
    M. Ledy, Director

March 31, 2009By:

/s/  HARVEY
    SILVERMAN Harvey
    Silverman, Director

March 31, 2009By:

/s/  ROBERT
    SUDACK Robert
    Sudack, Director

March 31, 2009By:

/s/  JOHN
    MILLER John
    Miller, Director

March 31, 2009By:

/s/  BRYAN
    BLOOM Bryan
    Bloom, Director

March 31, 2009




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##### Table of Contents



INDEX TO
    EXHIBITS
    ExhibitNumber

Description21
.1

List of Subsidiaries23
.1

Consent of Ernst & Young LLP relating to the
    registrants Registration Statement on
    Form S-8
    (Registration
    No. 333-150936)23
.2

Consent of Ernst & Young LLP relating to the
    registrants Registration Statement on Form S-8
    (Registration No. 333-150936)31
.1

Certification of Principal Executive Officer.31
.2

Certification of Principal Accounting Officer32
.1

Section 1350 Certification of Principal Executive Officer32
.2

Section 1350 Certification of Principal Accounting Officer