More drama at CKX as CEO Sillerman exits and may try to buy company
The soap opera that is CKX Inc., parent of "American Idol" producer 19 Entertainment, took another turn today as Chairman and Chief Executive Robert F.X. Sillerman resigned and hinted he may try to buy the company.
The company, which Sillerman founded in 2005, said Michael Ferrel, former president of CKX, will serve as acting CEO and Ed Bleier, an entertainment industry veteran and CKX board member, will become chairman of the board. Sillerman is its largest shareholder with a 20% stake in the company.
Besides 19 Entertainment, which produces "American Idol" and "So You Think You Can Dance" for Fox and also has a management business, CKX also has a majority stake in Elvis Presley's Graceland mansion and an 80% interest in licensing rights to the name and image of Muhammad Ali.
This has been a roller-coaster year for CKX. In January "American Idol" creator Simon Fuller resigned as chief executive of 19 Entertainment to start his own production company after bumping up against Sillerman. Fuller, who sold 19 Entertainment to Sillerman for $200 million in 2005, signed a lucrative consulting agreement with CKX.
In March, CKX confirmed that it has had discussions about selling the company. Actively looking at the company is One Equity Partners, which is the private-equity arm of J.P. Morgan. Allen Shapiro, president and chief executive of Mosaic Media Group, is involved in that effort as well.
Although News Corp. might seem like a logical candidate to want to acquire the company that produces two of its big hits, there is no interest there, people close to the company say. Dan Snyder -- the owner of Dick Clark Productions and the Washington Redskins, and who has expressed interest in the live entertainment business -- also took a quick look and passed.
In 2009, CKX had net income of $22.8 million on revenues of $328 million. The bulk of revenue for the company is generated by 19 Entertainment. The risk for any potential buyer is that so much of the company's fate is tied to the performance of one television show. "American Idol" is still a very strong show, but its ratings have been in a steady decline over the past few years. This is the last season that Simon Cowell will be the main judge; he is starting his own show, "The X-Factor."
Another challenge for any buyer is untangling the web of partnerships CKX has with its "American Idol" partners Freemantle Media and Fox.
-- Joe Flint
Photo: Robert Sillerman. Credit: Mitsu Yasukawa/FTT