Effective September 29, 2004, Bally Total Fitness Corporation entered into an amendment (the “Amendment”) to its $100 million securitization facility. The Amendment reduced the minimum Moody’s rating required to be maintained on Bally Total Fitness Holding Corporation’s 9-7/8% senior subordinated notes (the “Senior Subordinated Notes”) from at least Caa1 to at least Caa2. Subsequent to the effectiveness of the Amendment, Moody’s reduced its rating on the Senior Subordinated Notes to Caa2. S&P currently has a rating of CCC+ on the Senior Subordinated Notes. Subject to approval of Bally’s senior bank lenders, under the Amendment the required monthly amortization payments under the facility, scheduled to commence on November 1, 2004, would be increased from $5 million to $8.33 million. If such approval is not obtained, effective November 1, 2004 the minimum rating required to be maintained on the Senior Subordinated Notes will revert to Caa1 by Moody’s and CCC+ by S&P.

As previously announced, Bally has engaged J.P. Morgan Securities Inc. to act as lead arranger of a new $175 million five-year term loan facility to refinance existing debt, including the securitization facility.

The preceding description of the terms of the Amendment is qualified in its entirety by reference to the text of the Amendment, which is attached hereto as Exhibit 10.1.