From Deadline|London editor Tim Adler: Bob Sillerman, the chairman of CKX which owns American Idol producer 19 Entertainment, and Simon Fuller will be in Los Angeles next week thrashing out the latest Idol contract with Fox. It was meant to be wrapped up last September. As you know, Fuller has quit 19 Entertainment, the £92 million business with 200 employees he founded, to set up new company XIX to executive produce Idol. Remember, 5 years ago, U.S. entertainment group CKX bought 19 Entertainment for nearly $200 million, already making Fuller a rich man. But his new executive producing deal means he will share for the first time in the profits of American Idol and So You Think You Can Dance. Fuller will also continue to supply “general consulting services” to CKX, which owns the Idol format.
But now it appears CKX isn’t interested in investing in Simon Fuller’s new company. The deadline for it to buy 1/3 of XIX has come and gone. This means that Fuller can start talking to other investors. My insider tells me that Fuller’s talking to some “big fish.” One of these fish is Patrick McKenna, chairman of London financier Ingenious Media, but bigger fish are circling.
CKX has just announced its financial results for 2009. Revenue grew by 14% to $328 million, while gross profits fell by 1/3 to $68 million. Almost all of that profit came from American Idol. Still, there’s a huge question mark as to how popular the show will be without its star judge Simon Cowell.
Last week CKX confirmed it was winding down 19’s London office. The U.S. firm said during its latest earnings call that London costs $30 million a year to run. Sillerman called most of what 19 does in London “unproductive” and is going to slash spending here by at least 50%. Apart from Idol, 19 manages the careers of pop stars Annie Lennox and Will Young, backs Victoria Beckham’s fashion label, and runs a fashion website. But Sillerman just wants to concentrate on Idol. Sillerman also revealed that banks could force him to sell up if CKX’s share price is under $4 on April 26. The share price was bumping along at that level for most of last month. Happily for Sillerman, the stock has bounced back now that he’s announced year-end profits. But he’s admitted to making some bad real estate investments. A decision to sell off 19 or any other asset could be just an hour away, he said.