Michael Ferrel, the new CEO of the American Idol producer, says there are “a number of opportunities for further reductions in staff and overhead”. Announcing CKX’s second quarter results, Ferrel said the company had saved $15 million a year making 50 people redundant at London-based 19 Entertainment, its American Idol subsidiary. CKX also owns the Elvis Presley and Muhammad Ali franchises. CKX says its protracted sale negotiations to either former CEO Robert Sillerman or a rival bid from Simon Fuller are continuing, as are negotiations with U.S. TV network Fox for the 10th season of the show. It expects Fox to renew its American Idol deal by the end of Q4 or early 2011 at the latest. “It would almost be impossible that Fox wouldn’t want American Idol for its next season,” CFO Thomas Benson told investors.
The entertainment group was also coy about who will definitely be replacing Simon Cowell as judge. It expects to announce replacement judges shortly after Labor Day on September 6. Jennifer Lopez will be one, alongside possibly Steven Tyler from Aerosmith.
For the three months ended June 30, CKX’s revenue increased by 13% to $89.4 million. Almost $7 million of this growth was from American Idol, mainly due to more broadcast hours and higher licence fees. Operating income before depreciation, amortization and non-cash stock compensation (“OIBDAN”) was flat at $16 million.
Total revenue for the first half of the year was down 3% at $156.1 million, while OIBDAN fell by 46% to $23.9 million mainly due to the cost of making people redundant at 19 Entertainment.