CKX to potential buyers: Either step up, or we move on
All those would-be suitors of CKX Inc., parent of "American Idol" producer 19 Entertainment, better put their cash on the table or get ready to walk
That was the word from CKX executives Monday morning during a conference call with analysts to discuss the company's second-quarter results. The three potential bidders for the company are its founder and former chief executive, Robert F.X. Sillerman; "American Idol" creator Simon Fuller; and One Equity Partners, the private-equity arm of JP Morgan Chase & Co., which teamed itself up with Hollywood deal-maker Allen Shapiro.
Although all three have let the company know of their interest, no serious bids have emerged. Last week, Sillerman said in a Securities and Exchange filing that he was prepping a cash offer for CKX that would be between $5.50 and $5.75 per share. Sillerman already owns about 21% of CKX stock.
CKX Chief Financial Officer Tom Benson said the independent directors of the company's board were having conversations with Sillerman. Though Benson and Mike Ferrel declined to talk specifics about any offer, it was clear the clock was ticking. Benson said he was hopeful the company would know more about whether there was a sale in its future within the next couple of weeks. If a deal doesn't emerge, "the company needs to move forward."
In the meantime, CKX will continue to cut costs. Ferrel said CKX already had trimmed $15 million and laid off about 50 staffers and expected to make more cuts in the months ahead. Besides 19 Entertainment, which also produces Fox's "So You Think You Can Dance, CKX assets include licensing and merchandising rights to the images of Elvis Presley and Muhammad Ali. It also operates Graceland, Presley's former home in Memphis, Tenn.
On the "American Idol" front, Ferrel said CKX was in a "better place to influence 'American Idol' in this coming season than in any recent year." He stressed that CKX wanted to "refocus" the Fox show on the talent and that, with Nigel Lythgoe coming back to "Idol" as an executive producer, the program will have a "proactive field general."
Ferrel and Benson dodged questions on who the new judges would be on "Idol" when the show returned for its 10th season in January. With Simon Cowell and Ellen DeGeneres gone, Fox, 19 Entertainment and Fremantle, the show's other producer, are under heavy pressure to find the right judges to keep the "American Idol" machine running smoothly. The two names that have gotten the most attention are Jennifer Lopez and Aerosmith frontman Steven Tyler.
But no deals have been signed with either, and other candidates may emerge. CKX brass said it might be another month before a final decision on new judges was reached.
-- Joe Flint