EXCLUSIVE: 21st Century Fox‘s proposed joint venture with private equity firm Apollo Global Management that would include the Shine Group, Endemol and CORE Media Group is moving full steam ahead with the implementation of the first step in the consolidation process. I’ve learned that starting today, CORE’s management operations will be absorbed into Endemol North America. As a result, CORE’s executive team, led by president Marc Graboff, will be leaving. I hear Graboff informed the company’s staff of the restructuring in a meeting this morning. He is expected to stay on for a month, helping with the transition and may consult with the venture after that.

When contacted for confirmation, CORE released a statement to Deadline, declining further comment: “Marc Graboff and CORE Media Group have reached a mutual agreement for Marc to leave the company and pursue new opportunities. Marc will remain with the company for a brief period to ensure a smooth transition as CORE closes the recently announced deals and moves to its next phase of expansion. CORE is proud of its growth and success during Marc’s tenure and appreciates his efforts to ensure a smooth transition. CORE thanks Marc for his leadership over the years, and Marc wishes the company all the best going forward.”

graboffWith CORE’s legal, financial and HR departments eliminated or scaled back considerably as major layoffs at the company are looming, CORE is expected to essentially serve as a label under the Endemol North America umbrella, overseen by current U.S. television head Jennifer O’Connell. Ditto for CORE-owned 19 Entertainment, run by Jason Morey, and Matt Sharp’s Sharp Entertainment, which CORE acquired in 2012. O’Connell, Morey and Sharp are now expected to report to Endemol North America co-heads Cris Abrego and Charlie Corwin. CORE, 19 Entertainment and Sharp Entertainment will function alongside Endemol North America’s other subsidiaries 51 Minds, Original Media, True Entertainment and Authentic Entertainment. Producers who have deals with CORE — including Noreen Halpern, who has a scripted venture with CORE; Rhett Bachner and Brien Meagher, in whose company CORE owns a stake; as well as Howie Mandel and Rob Lee — are expected to continue to work with O’Connell. UPDATE: According to a rep for CORE and Apollo, CORE and Endemol North America will remain separate companies, with Abrego and Corwin providing hands-on guidance to CORE’s team.

In the proposed partnership, Endemol is the 800-lb gorilla, and the decision to fold CORE into it was considered all but inevitable. It was a matter of scale — Endemol, which has 90 companies in over 30 countries, has 6-8 times the earnings of CORE. (Endemol’s revenues in 2012 were around $1.9 billion.) Top executives from Endemol, CORE and Shine, including Graboff, were involved in discussions over the past couple of months about what the structure of the joint venture should be. All parties agreed that it made the most sense for the administrative staff of CORE to be eliminated, with Endemol North America, whose infrastructure is larger and more established, taking over. I hear Graboff met with Apollo brass and the two sides explored opportunities for him in the new company but he is too senior an executive, and the parties concluded that there was no need to create an extra layer, with Endemol North America’s Abrego and Corwin reporting to him.

Longtime NBC top business executive Graboff was brought in as president soon after Apollo bought CKX in 2011. At the time, CKX was a passive rights holding company with no ability to develop or produce television content and a music label dependent on two series, American Idol and So You Think You Can Dance, via CKX subsidiary and Simon Fuller-created 19 Entertainment. Under Graboff, CKX, renamed CORE in 2012, built infrastructure and transformed itself into a production company with 11 TV series in production and 40 others in active development. After working for 30 straight years, Graboff is expected to take a breather but will likely jump back in the fray soon as I hear his separation agreement with Apollo has no restrictions regarding taking a new job.

With CORE merged into Endemol North America, the focus shifts on Shine USA, with some expecting a similar scenario for Elisabeth Murdoch’s outpost, with Endemol as the surviving U.S. company of the new venture as 21st Century Fox and Apollo look to eliminate redundancy and reduce overhead. However, Shine USA has more expertise in scripted programming between the two, and others give it leverage in the pending merger of U.S. operations. Shine is strong internationally, owning 26 production companies across 11 countries, and observers see the company’s CEO Alex Mahon taking on a major role in the joint venture. I hear of utmost interest to 21st Century Fox is Endemol’s global footprint, tapping into the company’s slew of foreign production outfits to supply its Fox International Channels. I hear a decision how to combine the operations of Endemol North America and Shine USA is expected within the next month.

Apollo had been mulling combining Endemol and CORE for a while but its efforts were hindered by a power play for control of Endemol with the company’s co-founder John de Mol through the investment company Dasym Investment Strategies. Apollo took control of the company in February, paving the way for the joint venture with 21st Century Fox.