Can you post a to scale plan of the whole space and show all the windows and where the ducting is with a dotted line. All measurements clearly marked post her in jpeg format in a comment DO NOT start another post . I have a home gym in my MCM walkout where the ceilings are all 8' I am 5'9" and hve not issues with that height so alot will depend on how tall the isers of the gym are and also what equipment you use for your gym.A aimple floor plan is just easier for us to work with . For me the media room does not need a high ceiling so I would startthere with space planning and the gym in the area where the ceiling is high .So Does tha idea work visually I guess is the question, We have just one big open space really my gym at one end then a huge pool table and and bar and then the media space all ceiling at 8' probably not perfect but works for us .

Based upon the information provided, it depends.

Patricia this a flat lot so basement is underground completely. Drew the lines where hvac and steel beam would close. we did not add any windows in basement living area. only one egress window in bedroom.

height to ducts is 7’10” and after framing and floring it might be 7’6”. remaining area might be 8’5” after finish

Walking directly into a gym vs. an entertainment area is a bit idiosyncratic. And if a user is over 6', forget standing barbell presses under either ceiling height. (Our 6'4" in. son touches our eight-foot ceilings flat-footed.)

I'd think twice about keeping that "diaper" insulation.

"I'd think twice about keeping that "diaper" insulation."

I second that. You didn't say where house is located, but if in any cold climate, that insulation has to go, and start over with new XPS board insulation or closed cell spray foam. Then whatever wall type is suitable for the space.

@Seabornman yes we have cold months